Cover Page 1. Name: Pham Thuy Duong,(2430318) Class: DIM1VC

2. Name: Ivander Laurentius Atmojo (2430243) Class: DIM1VA

3. Name: Corhana Dan Andrei (2430403) Class: DIM1VA

4. Name: Gework Petrosjan (2431488) Class: DIM1VB

5. Name: Mohammed Ababakar (2431451) Class: DIM1VB

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Table of Contents
Chapter 1 Introduction ......................................................................................................................... 5 Chapter 2. European Travel Industry Overview .................................................................................... 6 2.1What is travel industry? ................................................................................................................... 6 2.2 European Travel Industry ................................................................................................................ 6 2.3. Business Model .............................................................................................................................. 9 2.5 Daughter companies of TUI and Thomas Cook ............................................................................ 13 2.6 Competitors of TUI and Thomas Cook .......................................................................................... 16 Chapter 3 Financial Analysis ............................................................................................................... 20 3.1.1 Thomas Cook Group PLC and TUI Travel PLC Key Figures Compared ......................................... 21 3.1.2 Profit & Loss Account Compared ............................................................................................... 23 3.1.3 Thomas Cook Group PLC and TUI Travel PLC Balance Sheet Compared .................................... 24 3.2 Profit Margin Analysis ........................................................................................................... 25 3.2.3 Profit Margin Analysis ............................................................................................................ 27 3.3.1 RETURN ON TOTAL ASSETS ANALYSIS .................................................................................... 31 3.4.1 Return on Stockholder Equity Analysis. ................................................................................. 35 3.5 Liquidity Ratios.............................................................................................................................. 41 3.5.2 Current Ratio Analysis ............................................................................................................ 42 3.6 Leverage Ratios ............................................................................................................................. 50 3.6.2 Debt to Asset Ratio analysis ................................................................................................... 51 3.6.4 Debts to Equity Ratio Analysis.................................................................................................... 53 3.7 Financial Analysis Summary ...................................................................................................... 54 3.7.1 Financial Analysis Conclusion ................................................................................................. 57 Chapter 4: Marketing ...................................................................................................................... 58 4.1. Mission statement: .............................................................................................................. 58 4.2. SWOT Analysis: .................................................................................................................... 59 4.3. Strategic Objectives: ............................................................................................................ 61 4.4. Market position:................................................................................................................... 64 4.5. Product and Service: ............................................................................................................ 76 4.5.1. TUI travel plc ..................................................................................................................... 76 4.5.2. Thomas Cook..................................................................................................................... 80 4.5.3. Financial Services related travel of TUI travel plc and Thomas Cook: ............................... 81 Page | 2

TUI Travel plc ....... 114 5................ 120 6..................................................................................................................... 109 5......................................................5............1................................................................4.................. 95 4............. Price .............................7........................................................................................................... 118 5....................................................................................3..... 89 4....2...... 114 5....................................................2......................3.............................................. 101 5....................................... 103 5.................................................... Ecommerce .. 109 5...................................................................................3.............................................................................................1.................................1....................................................... Supply chain: ..... Cross Channel Marketing ......................................................................................................Emloyee engagement ...................................1............Finland TUI ........................................Germany TUI ...1.................. Conclusion...........................2....................2.......................................................1................................................................... Company Background ....2.............. Conlusion for Marketing chapter ........................................................................ 102 5.......................2.......................................... Company Scale ................................................10.........................................3....... Sustainability Development and Social Responsibility .............4... Booking Routes ....... 119 5........10....... 98 5.........................3.2..1.......................10.................................................................................................... 101 5............................. 119 Chapter 6 Key Performance Indicators .............................. 116 5.................................................................................................................................9...........................3............. Personal expenses .................3............. 113 5.................8.................... Recruitment ......... 94 4............................................1........ Finland Thomas Cook ..........4...........................................1.. 95 4........................................................6...................................... Vision and Values: ............ Promotion ........... 96 4.. 99 5................................................................................................................. Germany (Thomas cook) ..... Human Resources Management ...................................11..................................................................3........................................3................. 106 5............................................................................... Company Profile ..... 94 4................................................ 106 5.............................12........1..............3....................1..................... Company Organization ...............2..................................................1............1............................... 109 5................................... Organizational structures .................... Distribution channels .....................................................................3... Thomas Cook.................................. 123 Page | 3 ................. Mission Statement .......... 117 5.....2.......................................3................1 Financial ... 99 5............. 88 4.............. 116 5....................... 98 Chapter 5 Management and Organization: .....................................................................................................3...3..................................... The Boston Consulting Group box (BCG matrix)...2 Marketing .........................................................................3.....................................1.... 84 4.3....................10.............................3.................. Distribution ..........3.............................................. Job Selection ........ 120 6.........................4.............. 85 4...........

..........................................2.................... 127 6.....................................................................3........................6................................. 129 6..................... 140 6....................1 Departmentalization . 124 6.......................................... 132 6...............3.....2.....................................1................................ 131 6.................................................... 128 6...........2 Recruitment Plan................. 124 6......................................................................................................2......................................................................................................... 124 6.3........................................................ 136 6.........................................................2............ 134 6...........................................................3. 171 Page | 4 ...............................3..........2........3................................1Company profile.................................1Mission Statement .................................................3...............................................................................................5 Market Dynamics Germany....................................................................................................................................................................................................3..............4............................ 153 Cooperation Agreement Group 6 (Period 4) .....1..................3............................................................................................. 135 6..............2 SWOT Analysis ......................1 Mission Statement ..............................2.........4......3... References.....................4............. 135 6...............2 Market Dynamics Continental Europe ...3 Strategic Objective ....... 144 Appendixes 3 ...............................3.........2..............6 Distribution Channels...................2..................................................3.............. 136 6....................... 128 6..............2...5 BCG MATRIX .................4 Market Position..... 141 Chapter 7....1 Organizational Structures.................... 130 6..........................2........................3 Sustainability Development .........2Company Organisation.............................2...................2.........3.....................3............3 Market Dynamic Northern Europe: .......................................1.........................................1 Market Dynamics UK & Ireland .......2...........................................................................4........................3.......................................................................................2................................. 139 6.....3.....................................3 Management Key Performance Indicators ............3.............................................................4 Market Dynamics North America .....................................................................................3........................3 Marketing Key Performance Indicators............... 142 FINANCIAL APPENDICES ..........................................2............... 139 6.............2 Vision and Mission ....4...................... 135 6..... 133 6..3......

Chapter 1 Introduction In this semester. In our analyzing procedure. financial conditions etc. By those efficient tools. we are going to use the external and internal analysis where we have much experience and interview method in real context. Page | 5 . strategy. market share. we will come to a conclusion which one is “better”. export ability.). our task is to set a bench mark based on quick scan on two travel companies--UI and Thomas Cook. we will measure them from each comparable aspect and then pose our constructive conclusions based on a range of data analysis and interpreting. Through the comparison of Key Performance Indicators (such as mission. we will draw a full picture of two selected companies. The main phrases consist of two steps. turnover. First of all.

8% of its land area. Russia is the largest by both area and population. the Caucasus Mountains (or the KumaManych Depression).000 sq mi) or 2% of the Earth's surface and about 6. Europe is generally divided from Asia to its east by the water divide of the Ural Mountains. the Mediterranean Sea to the south. Europe's share may fall to about 7% by 2050. European Travel Industry Overview 2. Europe is the third-most populous continent after Asia and Africa. 2. the Atlantic Ocean to the west. In 1900. while Vatican City is the smallest. The World Tourism Organization defines tourists as people who "travel to and stay in places outside their usual environment for more than twenty-four hours and not more than one consecutive year for leisure. and the Black Sea to the southeast. Comprising the westernmost peninsula of Eurasia.000 square kilometers (3.180. the Caspian Sea. especially after the Page | 6 .930. Europe is bordered by the Arctic Ocean and other bodies of water to the north. Yet the borders for Europe-a concept dating back to classical antiquity-are somewhat arbitrary.1What is travel industry? Travel (or Tourism) is going for entertainment. the Ural River. according to the United Nations (medium estimate). business and other purposes not related to the exercise of an activity remunerated from within the place visited". with a population of 731 million or about 11% of the world's population.2 European Travel Industry Geography Conventionally. Europe is the world's second-smallest continent by surface area. leisure or business purposes. and the Black Sea and connected waterways to the southeast. as the term continent can refer to a cultural and political distinction or a physiographic one. Europe is one of the world's seven continents. Europe. Europe's share of the world's population was 25%. However.Chapter 2. Of Europe's approximately 50 states. It played a predominant role in global affairs from the 16th century onwards. is the birthplace of Western culture. covering about 10. in particular Ancient Greece.

9 million 58. Profile of European Market of Travel Industry Through Europe is the world's second-smallest continent. This is a yearly increase of 6. European integration led to the formation of the Council of Europe and the European Union in Western Europe. European nations controlled at various times the Americas.2 million 24.9 million 18. both of which have been expanding eastward since the fall of the Soviet Union in 1991. the Middle East.4 million 25.9 million 78.2 million 25.4 million 21.3 million 53. Europe is the main destination with a share of over 80%.3 million 81. Europe was divided along the Iron Curtain between NATO in the west and the Warsaw Pact in the east. Both World Wars were largely focused upon Europe.0 million 24.4 million 58. and 1.6 billion of tourist arrivals from Europe in 2020.5 million 21.9 million 41.7 million 30. and large portions of Asia.4 million 1 2 3 4 5 6 7 8 9 10 France United States Spain China Italy United Kingdom Ukraine Turkey Germany Mexico The World Tourism Organization (WTO) predicts a total number international arrivals are expected to reach 1 billion.0 million 57.1 million 22.6 million 58. During the Cold War.7 million 43. most of Africa.9 million 23. Between the 16th and 20th centuries. European countries are attractive destinations international tourists.7 million 18. Western Europe and Northern Europe are expected to be the most important originating regions.0 million 56. Total outbound travel increased by an average of 2. Common travel trends in Europe  Leisure travel Page | 7 . most of the top visited countries continue to be on the European continent. followed by East Asia Pacific. According to World Tourism Organization.0 million 42.7% per year between 2003 and 2006 to 327 million. Africa and South Asia. the number of arrivals to European destinations increased by an average of 1. greatly contributing to a decline in Western European dominance in world affairs by the mid-20th century as the United States and Soviet Union took prominence.beginning of colonialism.2 million 49.7 million 30. Non-European destinations make up less than 20% of the trips made by EU citizens.1 million 30. The most popular destinations will be the Americas.9 million 22. Rank Country UNWTO Regional Market Europe North America Europe Asia Europe Europe Europe Europe Europe North America International International International tourist tourist tourist arrivals arrivals arrivals (2008)[9] (2007)[3][9] (2006)[10] 79.1% starting from 2000. Between 2003 and 2006.7% per year.7 million 54.9 million 23.0 million 51. Oceania.

Poland. Czech Republic. Slovakia. The British origin of this new industry is reflected in many place names. Examples of the more common niche tourism markets include: * Agritourism * Medical tourism * Culinary tourism * Nautical tourism * Cultural tourism * Pop-culture tourism * Ecotourism * Poverty tourism * Extreme tourism * Religious tourism * Geotourism * Space tourism * Heritage tourism * War tourism * LGBT tourism * Wildlife tourism Page | 8 . allowing the transport of large numbers of people in a short space of time to places of leisure interest. Germany. one of the first and best-established holiday resorts on the French Riviera.Leisure travel was associated with the Industrial Revolution in the United Kingdom – the first European country to promote leisure time to the increasing industrial population. Austria. France. France. Bulgaria. so that greater numbers of people could begin to enjoy the benefits of leisure time. the Hotel Carlton or the Hotel Majestic – reflecting the dominance of English customers. Many of these have come into common use by the tourism industry and academics. Italy.  Adjectival tourism For a more comprehensive list. Iceland. old. each with its own adjective. Spain. see List of adjectival tourisms. and Switzerland)  Mass tourism Mass tourism could only have developed with the improvements in technology. Others are emerging concepts that may or may not gain popular usage.  Winter tourism Approximately 927 ski resorts are located in the various European countries (e.g. Norway. Sweden. Adjectival tourism refers to the numerous niche or specialty travel forms of tourism that have emerged over the years. In Nice. in many other historic resorts in continental Europe. well-established palace hotels have names like the Hotel Bristol. the long esplanade along the seafront is known to this day as the Promenade des Anglais.

Loyalty organizations. Examples are clubs of mountaineers that go climbing together. There is an increasing tendency among organizations. Major tour operators generate most of their volumes through popular. The outbound tour operator offers the product via travel agencies or directly to consumers through the Internet. First Choice (http://www. Specialized tour operators concentrate on niche markets currently not being served by the major operators. In the EU. Business Model Holidays and trips can reach the final consumer in various ways.2. standardized mass-market products (sun. Big and smaller players are all fighting for their market position. an outbound tour operator offers a complete package to the inclusive tour traveller. diving clubs that travel to the Antilles and fishermen who organize foreign fishing holidays together.rewetouristik. two kinds of tour operators can be found: major tour operators and specialist tour operators. catering and excursions. The outbound tour operator.com). operating under separate trade names. an increasing number of consumers are looking for lower prices. such as the Dutch „Airmiles‟. Another possibility is to cooperate with a tour operator specialized in their field of interest. resulting in fierce competition and. They book all foreign accommodation themselves and act as tour operators for their members.com). Some large tour operators have set up specialized branches as well.uk) and Kuoni (http://www. can also be included in this channel. Some examples are TUI (http://www. accommodation (hotel).thomascook.kuoni. therefore. clubs.co. It is becoming increasingly common that packages can be composed of individual modules that the traveler can select him or herself. Thomas Cook (http://www.com). a small number of mainly German and British players dominate the tour operator market.com). the tourism market is changing and major operators realize that they will have to meet individual consumer demand to keep their clients. consisting of transport (airline seats). sea.tuigroup. Rewe/LTU (http://www. Member organizations Another potential channel consists of member organizations. excursions and more. Outbound tour operators In general. However. acting as tour operators. sporting teams and/or more organized parties to organize holiday trips and offer them to their members. Major and specialized tour operators In general.firstchoice.3. Page | 9 . cooperates with an inbound tour operator in the destination country who selects elements such as accommodation. moreover. to serve special segments in the market. Business model present how travel industry produce the values for their customers in order to receive profit in return. sand).

almost all bookings take place through the intervention of an inbound tour operator.Inbound tour operators (local agents) Inbound tour operators are the vital link between DC tourism suppliers and EU outbound tour operators. like hotels. bus companies and organizers of activities and promote and sell travel packages to outbound tour operators and travel agencies. According to interviews with EU tour operators. Thomas Cook Business Model TUI Business Model Page | 10 . Inbound tour operators represent local tourism suppliers.

1: Travel Industry Business Model.CAR RENTAL COMPANIES BOAT COMPANES AIRLINE FIRMS TRAIN COMPANY ADVERTISING COMPANIES MULTIMEDIA COMPANIES PR AGENCIES HOTELS MOTELS HOSTELS CAMPING COMPANIES RESTAURENTS CATERING COMPANIES VISTING PLACES ENTERTAIMENT PLACES ENTERTAINMENTAL EVENT COMPANIES TRANPORT MARKETING ACCOMODATION CATERING ENTERTAINMENT INBOUND TOUR OPERATORS CLUBS MENBER ORGANIZATIONS SPORT TEAMS OUTBOUND TOUR OPERATORS SPECIALISED TOUR OPERATERS ORGANIZED PARTIES TRAVEL AGENCIES INCLUSIVE TOUR TRAVELLERS IDEPENDENT TRAVELLERS Table 3. Page | 11 .

4. restaurant and bar operators Hotel. Business partners in Travel industry (European market) 5. leisure and sports centers Meeting and people finder services Accommodation Hotels and motels Hotel reservation services Hotel.2. restaurant and leisure property owners Restaurants Catering services Holiday camps and tourist complexes Central-Eastern Europe 7167 1323 863 700 7594 2277 1714 Western Europe 15231 290 1251 168 2633 3575 400 Page | 12 . tour operators Tourism promotion offices Tourist coach services Tourism and recreational consultants Tourist.1 Firms in European Travel Industry Travel and Tourism Company Central-Eastern Europe 7401 663 1313 728 2932 656 Western Europe 5431 398 1169 706 1233 78 Travel agents.

com.Transportation Central-Eastern Europe 383 426 47 Western Europe 580 1337 114 Airline companies Coaches. Page | 13 . minibuses hire & rent Ship.leading mainstream brands and specialist travel businesses. LateRooms. Hotelbeds.com. The Moorings. Selections of our well-known brands include TUI. Fritidsresor. buses. Hayes & Jarvis and Turchese. Thomson. ocean-going company Travel Insurance Travel insurance company Central-Eastern Europe 842 Western Europe 1082 2. Quark. Nouvelles Frontières.5 Daughter companies of TUI and Thomas Cook TUI Travel PLC TUI Travel has over 200 brands which are comprised of market.

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Thomas Cook Group plc Thomas Cook Group operates a portfolio of market-leading travel brands in 21 markets. Page | 15 .

two kinds of tour operators can be found: major tour operators and specialist tour operators. First Choice and Kuoni. sea. operating under separate trade names. to serve special segments in the markets. Below it is a rough picture of their competitors. moreover. Some examples of their main competitors are Rewe/LTU. a small number of mainly German and British players dominate the tour operator market. an increasing number of consumers are looking for lower prices. In EU. Page | 16 . the tourism market is changing and major operators realize that they will have to meet individual consumer demand to keep their client. Major tour operators generate most of their volumes through popular. Some large tour operators have set up specialized branches as well. sand). Specialized tour operators concentrate on niche markets currently not being served be the major operators.2. resulting in fierce competition and.6 Competitors of TUI and Thomas Cook In general. standardized mass-market products (sun. Big and smaller players are all fighting for their market position. However.

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However. The optimal capital structure is determined by the individual company. It is useful to compare a company's profitability against that of its major competitors in its industry. Liquid assets are current assets such as cash. net profit margin. and numbers from the data presented and the analysis since some data were collected in different months and different sources. Underlying Revenue and Operating Profit compared to the two company‟s Statutory Revenue and Operating Profit.Chapter 3 Financial Analysis Introduction In this chapter we are going to compare Thomas Cook Group PLC with TUI Travel PLC from 2006 up to 2009. Liquidity Ratios A company's liquidity is a measure of its ability to meet short-term obligations. An explanation of growth or decrease of ratios or in variance between Underlying Revenue and / Underlying Operating Profit compared to the Statutory Revenue and / Operating Profit will be given in each year. Revenue and Cost ratio. Then we will present a comparison of Profit and Loss Account of both companies. The balance between debt and equity is called the capital structure. the greater is its profitability. return on total assets. Such a comparison tells whether the company is operating more or less efficiently than its rivals. marketable securities. including stock and retained earnings. Debt has a lower cost because creditors take less risk. debt can be risky to the firm because if enough profit is not made to cover the interest and principal payments. We will present a comparison of Key Figures from both companies from 2006 to 2009. A number of different profit ratios can be used. the change in a company's profit ratios over time tells whether its performance is improving or declining. bankruptcy can occur. Liquidity Ratio. In addition. Which will present the significant differences between the two companies. The more efficient the company. Page | 20 . Financial Performance Indicators Profit Ratios Profit ratios measure the efficiency with which the company uses its resources. Share Holder Return Ratio. Leverage Ratios A company is said to be highly leveraged if it uses more debt than equity. Please note that there will be some differences in value. and each of them measures a different aspect of a company's performance. Two commonly used liquidity ratios are current ratio and quick ratio. accounts receivable. Leverage Ratio. The most commonly used profit ratios are gross profit margin. and we will analyze deeper in matters of Profit Ratio. An asset is deemed liquid if it can be readily converted into cash. We will also present a comparison between Thomas Cook Group PLC and TUI Travel PLC Balance Sheet for 4 years from 2006 to 2007. they know they will get their interest and principal. and so on. and return on stockholders' equity.

4 0.1 Thomas Cook Group PLC and TUI Travel PLC Key Figures Compared KEY FIGURES1 Year Ended 30 September Earings Per Share Basic (p) Earings Per Share Diluted (p) Earings Per Share Adjusted (p) Earnings Per Share Growth (%) Total Dividend (p) Operating Margin (%) ROCE (%) Dividend Cover Dividend Yield Price / Earnings Ratio Dividend Per Share Growth(%) 2009 1.2 11.5 n/a 112 n/a n/a 2009 -1 -1 23.1.9 0.8 17 10.26 39.3. Thomas Cook is performing better in almost every aspect.48 17.8 26.6 20.47 7.75 2 -53 2.co.6 -24.5 3.7 8.redmayne. We can see that after both company are merged. except the price of the stock in which TUI Travel PLC is higher than Thomas Cook Group PLC in several times of the year.6 8.2 10.4 7.01 22 0.71 3.22 4.9 1.35 26.3 10.16 23 6.25 -34 60 n/a 10.8 1 Thomas Cook Group PLC 2008 2007 2006 5.4 42 -16 9.4 14.33 -2 -20 2.6 -4 Comparison between the two key figures of the companies shows that Thomas Cook is performing times better than TUI Travel PLC since after they are merged with MyTravel. we can see the difference between the price in the graphs shown in the next page.4 -1 0 41 22 2.8 1.7 n/a 8.48 -37.35 5.7 0 5 2.46 4. 1 Source: http://www.4 0.98 n/a 4.71 4.5 15 33 2006 -37.uk/ Page | 21 .4 n/a 10.7 10 TUI Travel PLC 2008 2007 -24.6 17.62 5 n/a 2 2 3 288 215 180 2. From the table TUI Travel PLC has earnings per share more than 400% lower than Thomas Cook Group in 4 years in a row from 2006 to 2009.01 22 0.1 1.

and this is mainly caused by the recent recess in economics in which we have just recovered from.This is the value of Travel and Leisure Sector in Millions of Euros. although TUI Travel PLC price drops. Page | 22 . and this is due to TUI AG large Capital which makes the Stock still afloat when Thomas Cooks seems to be sinking in December 2008. From the two price per share graph we can see that Thomas cook suffers greatly in December 2008. it didn‟t go as low as Thomas Cook‟s. as it shows the Travel and Leisure Sector starts declining from 2007 to the lowest point in around December 2008.

3.1.2 Profit & Loss Account Compared
Profit & loss2
Year Ended 30 September £ millions Turnover Operating Profit Net Interest Profit Before Tax Profit After Tax Total Dividend Retained Profit / Loss 2009 9268.8 164.2 -102.1 56.1 18.3 n/a n/a

Thomas Cook Group PLC
2008 8111.5 134.7 -84.7 48.4 43.6 n/a n/a 2007 6404.5 151.8 1.1 190.2 150.7 n/a n/a 2006 7780.2 239.5 -25.4 219 179.8 n/a n/a 2009 13863 28 -89 -52 -10 n/a n/a

TUI Travel PLC
2008 13932 -196 -83 -267 -267 n/a n/a 2007 12839.9 45.6 -37.7 18.4 6.9 n/a n/a 2006 12180.3 -252.3 -25.8 -268.6 -380.8 n/a n/a

A quick comparison between the profit between both company we can see immediately that Thomas Cook is more profitable than TUI Travel PLC in 2006 to 2009, we will analyze the profit margin between these two company later in this chapter. The turnover / revenue of TUI Travel PLC is significantly higher than Thomas Cook Group PLC, but we can see that TUI Travel PLC operating Profit is not as High as Thomas Cook Group PLC. From both companies we can see that both companies are losing Revenue as well as Operating profit in 2007, in which they have just merged; TUI Travel merged with First Choice, and Thomas Cook merged with MyTravel PLC. Although in 2008 Thomas cook managed to gain back the revenue and still making a profit of £ 134.7 million, TUI Travel PLC loses £ 196 million after the merger, details of the profit and loss will be explained in the profit margin Analysis.

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Source: http://www.redmayne.co.uk/

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3.1.3 Thomas Cook Group PLC and TUI Travel PLC Balance Sheet Compared Balance Sheet3
Year Ended 30 September £ millions Intangible Assets Tangible Assets Fixed Investments Total Fixed Assets Stocks Debtors Cash at Bank and in Hand Total Assets Creditors Amount Within 1 year Creditors Amount After 1 year Total Liabilities Net Assets Net Current Assets Called Up Share Capital Share Premium Account Other Reserves Profit and Loss Account Shareholders’ Funds Minority Interests 2009 3775.1 975.4 56.3 5380.9 27 n/a 550.2 7071.3 5214.1 403.4 5344.1 1727.2 n/a 57.7 8.9 2115.7 -474 1708.3 18.9

Thomas Cook Group PLC
2008 3438.1 897.1 72.1 4943.3 24.2 n/a 761.3 7021.5 5067.2 285.5 5013.1 2008.4 n/a 59.8 8.9 2192.4 -265.4 1995.7 12.7 2007 2883.5 835.3 62.3 4199.2 19.1 n/a 622.3 5817.4 2482.2 321.5 3696.8 2120.6 n/a 66.1 6.8 1995.2 44.2 2112.3 8.3 2006 1214.3 875.4 63 2508.9 10.5 n/a 736 3942.3 2025 510.9 3344.2 598.1 n/a 303.7 539.7 -22.7 -255.2 565.5 32.6 2009 4737 964 189 6309 51 n/a 790 9149 4764 624 6863 2286 n/a 112 n/a 2775 -604 2283 3

TUI Travel PLC
2008 4429 926 170 6005 51 n/a 1130 9327 8729 467 6731 2596 n/a 112 n/a 2749 -270 2591 5 2007 4216.9 1317.5 145.5 6106.8 39.7 n/a 1958.7 9649.4 3999 522.4 7018.6 2630.8 n/a 111.8 n/a 2428.7 82.9 2623.4 7.4 2006 2463.4 1522.7 92.9 4720.9 28.1 n/a 1160 8048.8 3520.7 621.5 6228.1 1820.7 n/a n/a n/a n/a n/a 1820.7 n/a

A quick summary from the 4 years Balance Sheet between TUI Travel PLC and Thomas Cook Group PLC, we can immediately asses that Thomas Cook Group PLC has less Total Assets compared to all TUI Travel PLC in 4 years. We will also analyze the Thomas Cook strategy on Light Asset Operation in details in Return on Total Asset Analysis. We will also analyze on TUI Travel PLC Fixed Investment such as new Boeing Planes the company bought to anticipate the huge Increase in demand for long haul tourism , in which the recession halt it.

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Source: http://www.redmayne.co.uk/

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3.2 Profit Margin Analysis 3.2.1 Gross Profit Margin
Gross profit margin. The gross profit margin simply gives the percentage of sales available to cover general and administrative expenses and other operating costs. It is defined as follows: Gross Profit Margin = Sales Revenue - Cost of Goods Sold Sales Revenue
Gross Profit Margin Year Ended 30/09/09 23.65% £m 9,268.80 £m 7,076.50 THOMAS COOK GROUP PLC Year Ended Year Ended Year Ended 30/09/08 30/09/07 30/09/06 23.19% 23.64% 23.31% 4 £m 8,754.20 £m 6,399.85 £m 5,244.245 £m 6,724.30 £m 4,886.756 £m 4,021.857 Gross Profit Margin Pro Forma Year Ended 30/09/07 7.02% (0.702) £m 12,839.90 £m 11,800.40

Gross Profit Margin Revenue Cost Of Providing Tourism Services

Gross Profit Margin Revenue Cost Of Providing Tourism Services

TUI TRAVEL PLC Year Ended Year Ended 30/09/09 30/09/08 8.35% 7.33% (0.0835) (0.0733) £m 13,863.00 £m 13,932.00 £m 12,705.00 £m 12,911.00

Gross Profit Margin
0.23 0.24 0.17 0.24 0.25 0.20 0.15 0.08 0.10 0.05 Year Ended 30/09/06 Year Ended 30/09/07 Year Ended 30/09/08 TUI Year Ended 30/09/09

0.08

0.07

Thomas Cook

3.2.2 Net Profit Margin

4 5

Converted from €m 9439.3 based on Exchange currency on date from Converted from €m 7780.2 based on Exchange currency on date from 6 Converted from €m 7207.6 based on Exchange currency on date from 7 Converted from €m 5966.7 based on Exchange currency on date from

Apendix 2 Apendix 2 Apendix 2 Apendix 2

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90 £m 0 Net Profit Margin Net Income / Profit From operation Sales Revenue Net Profit Margin 0.90 £m 0 £m 13.04 0.77% £m 164. This ratio is important because businesses need to make a profit to survive in the long run.02 0.5 based on Exchange currency on date from Apendix 2 Converted from €m 218.00 -£m 184. Net profit margin is the percentage of profit earned on sales.01 0.00 £m 12.399.10 £m 154.244.32% 1.26% 0% £m 37.2 based on Exchange currency on date from Apendix 2 10 Converted from €m 9439.80 THOMAS COOK GROUP PLC Year Ended Year Ended 30/09/08 30/09/07 1.863.2 based on Exchange currency on date from Apendix 2 Page | 26 .932.03 0.01 0.00 £m 161.27% -1. It is defined as follows: Net Profit Margin = Net Income Sales Revenue Net Profit Margin Year Ended 30/09/09 1.03 0.3 based on Exchange currency on date from Apendix 2 11 Converted from €m 7780.02 0.01) (0.754.20 £m 6.94 9 £m 5.82% £m 147.24 11 Net Profit Margin TUI TRAVEL PLC Year Ended Year Ended Year Ended Year Ended 30/09/09 30/09/08 30/09/07 30/09/06 0.268.02 0.01) Year Ended 30/09/06 Year Ended 30/09/07 Year Ended 30/09/08 TUI Year Ended 30/09/09 0.85 10 Net Profit Margin Net Income / Profit From operation Sales Revenue Year Ended 30/09/06 2.41% £m 107.02) Thomas Cook 8 9 Converted from €m 227.22% 2.25 8 £m 8.20 £m 9.01 (0.00 £m 13.839.Net profit margin.00 (0.

9 million) and Airlines Germany (up €73.3 per cent on the prior year.4 million).3 Profit Margin Analysis From the Chart we can see that Thomas Cook has more gross profit margin compared TUI travel PLC.12 The shortfall in gross margin.809. The pro forma profit from operations increased by 49. These decreases were offset by increases in Northern Europe (up €42.8% to £365. Revenue decreased year on year in the UK (down €22.3 million). an increase of 11.4 million). a decrease of 1.3 million year on year. with an underlying decrease in UK revenue of 3% being offset by an increase in Northern Europe of 9%.8 million) and Corporate (down €34.5 million. 2007 In 2007.2. but Thomas Cook gross profit margin is still more than 15% higher than TUI. such that the pro forma profit from operations increased by €32. which is £25m higher than our previous target.8m. North America (down €124. The cost for providing Tourism services from both company reach almost more than 80% of their total revenue.9 million).9m. However.8% on the prior year period. The integration is progressing well and TUI now targeting £175m of synergies. however. 12. Thomas Cook Group PLC pro forma revenue for the period was £8. Thomas Cook Group PLC have just been merged with MyTravel PLC has bring the Group pro forma revenue for the year was €11. in 4 years straight even though TUI travel has almost 4 times the revenue of Thomas Cook in 2006. Continental Europe (down €90. Group revenue was flat year on year. We believe that the huge difference between TUI Travel PLC and Thomas Cook Group PLC gross profit margin is mainly on the cost of providing tourism services. excluding the impact of translation and acquisitions.14 TUI travel PLC has had an excellent first year (in 2008) as a merged company with underlying operating profit up 53% and significantly improved profitability across the business.3. was more than offset by reductions in overhead costs.2 3 Taken from Thomas Cook Group Annual Report and Accounts 2007 Taken from Thomas Cook Group Annual Report 2008 4 Taken from Annual Report and TUI Accounts 2008 Page | 27 .714.13 2008 In 2008.

TUIfly has since been declassified as a disposal group held for sale. the integration of acquired businesses and further restructuring activities to increase business efficiency. Excluding the impact of translation.9m.3m.268.00. an increase on the pro forma prior year of £49m. a significant turnaround in France. the company loss £m 184. Profit from operations before exceptional items for the year was £414. our first year as a fully merged business (2007: £261m). and the weakening of sterling against the euro and dollar which served to push up accommodation costs. an increase of 6% on the pro forma prior year.3m. reflecting reduced capacity in all our major markets. offset by the year on year increase as a result of acquisitions in this year and last.4 Even the underlying operating profit of TUI Travel PLC in 2008 after the merger raise up to more than 58%. As a result of its reclassification as a disposal group held for sale earlier in the year. incurred as part of the integration programmes across the UK Mainstream and Group and Global businesses affected by the merger.15 2009 For the year 2009.8m.0m and is included within the 2008 total charge of £86. Trading was also adversely impacted by the swine flu outbreak. This has primarily been achieved as a result of a strong performance in the UK driven by improved trading and the delivery of synergies. Group revenue was down 1%.7m was recognised in respect of TUIfly. The adverse 15 Taken from Annual Report and TUI Accounts 2008 Page | 28 .9m. particularly in our UK business. our airline in the German source market. further improvement in Nordics from strong winter trading and improved summer trading in Germany and Austria. and this is mostly due to : • Restructuring expenses of £65. capacity was reduced in all major markets as we sought to manage the Group through the global recession. Thomas Cook Group PLC revenue for the year was £9. increases in fuel prices year on year. which relate to restructuring programmes already in progress prior to the merger. a goodwill impairment of 111. Amortisation of business combination intangibles arising on the merger amounted to £80.TUI travel PLC delivered a £137m improvement in underlying operating profits to £398m in 2008. • Merger-related integration costs of £164. or 13%. The Specialist Sectors also contributed to the result through a combination of organic and acquisition led growth. as we actively managed the business through the global recession. As noted above.

however. resulting in an organic revenue decline of 10%. partially offset by 4% higher selling prices. The graph also clearly stated that TUI Travel PLC net profit margin is lower than Thomas Cook Group PLC in the last 4 year.932m). the realization of additional merger synergies and contributions from acquisitions made this year and last. 16 17 Taken from Thomas Cook Group Annual Report 2009 Taken from Annual Report and TUI Accounts 2009 Page | 29 .16 Thomas Cook Group revenue for 2009 was slightly lower than the prior year at £13.impact of the above was more than offset. and we conclude that Thomas Cook is more profitable than TUI in the tourism industry. The Group achieved a £45m improvement in underlying operating profits to £443m in 2009 (2008: £398m). a year on year foreign currency translation benefit. This improvement has primarily been achieved by the delivery of integration synergies and the recovery of scheduled flying losses in the UK and Germany. and weaker demand and excess market capacity in Canada. Capacity reductions reduced underlying revenue by 14%. Foreign currency translation increased revenue by 9% due to Sterling weakness and revenue from acquisitions resulted in a 1% increase over the prior year. which we can assume that Thomas Cook is doing better than TUI since they have a rather high gross profit margin and steadily in around 20% in the last 4 years despite their revenue is by far lower than TUI Travel PLC.863m (2008: £13.17 There are huge difference (more than 15%)from Thomas Cook Group PLC and TUI Travel PLC gross profit margin in 4 years in a row. The improvement was partially offset by the adverse impact on our French business of weaker demand and socio-political events in the French West Indies and Madagascar. by strong cost control.

649.94% 4.06 0.81% £m 178.657.00 £m 9.04 0.648.20 £m 7.03 0. It is defined as follows: Net Income Available to Return on = Common Stockholders Total Assets Total Assets Return on total assets THOMAS COOK Year Ended Year Ended Year Ended Year Ended 30/09/09 30/09/08 30/09/07 30/09/06 0.76 £m 2.03 0.07 0.20 £m 497.01 - Year Ended 30/09/06 Year Ended 30/09/07 Thomas Cook Year Ended 30/09/08 TUI Travel PLC Year Ended 30/09/09 Page | 30 .38% 3.662.89 £m 127.05 0.98% 5.00 £m 9.15% 7.05 0.30 £m 1.3.3 Return on total assets Return on total assets.071.05 2.50 £m 166.15 £m 5.02 0.09% 2.40 £ m 119.03 0.02 0.04 0.00 £m 371.327.04 0.30 £m 357.07 2.02 0.149.05 0.05 0.021.17% £m 218.03 0.05 0.52% 5.00 £m 9.10 £m 7.05 0.80 Net Income Total Assets Return On TotalAssets 0.07 0.03 0.08 0. This ratio measures the profit earned on the employment of assets.31 Return on total assets Net Income Total Assets Return on total assets Return on total assets TUI Year Ended Year Ended Year Ended Year Ended 30/09/09 30/09/08 30/09/07 30/09/06 0.

4 million (2006: €598.3.1 million). although the margin drops back to 2. in respect of surplus cash held in Condor. expected to be approximately €120 million. Thomas Cook Group will experience an estimated reduction in net financial debt of €185 million and in pension obligations of €266 million. this is due to in September 2007.52% in 2009.1 per cent in February 2009 and 24. The merger is subject to approval by the Bundeskartellamt (Federal Cartel Office).9 per cent in February 2010 or earlier. to be merged into Air Berlin plc. Net assets at 31 October 2007 were €3.17% in 2006 to only 2.18 By looking at the graph we can assess that TUI Travel PLC Return on Total Asset trend is going down from 7. 2 Taken From Thomas Cook Annual Report 2007 Page | 31 . Thomas Cook Group PLC reached agreement on the terms for Condor Flugdienst GmbH. unlike the revenue that raise in a stable rate over the years.94% on 2007 to 5.042. Thomas Cook Group will also receive new Air Berlin shares with a value between €380 million and €475 million and a cash payment. whose primary evaluation process is due to be completed by 7 April 2008. Thomas Cook Group PLC. the Group‟s German airline.09% in 2008. believe to meet their optimum size. managed to climb up from 2. In 2007 Thomas Cook also has to close 144 shops in UK and have to rename 812 Shops which into they Thomas Cook.1 RETURN ON TOTAL ASSETS ANALYSIS From The Graph we can see that the return of total assets from both companies are unstable. The deal is expected to be earnings-enhancing in 2008/09.3. The business combination of Thomas Cook AG and MyTravel has been 18. We can also see that after Thomas Cook Merged with MyTravel PLC in 2007 their Return On Total Assets drops quite significantly. It is intended that the merger will be completed in two stages – 75.53% in 2009.

in which in 2006 before the merger with MyTravel Group PLC.0 million (2006: €65.5 million. Consequently. their return on total asset declined rapidly.4.903. Net funds at 31 October 2007 were €357.5 •Further information on the separately disclosed items is included in Note 3 of the consolidated financial statements.2. not depend on ownership.1m.3 million.7m was recognised in respect of TUIfly. In 2008. Content Heavy” Model in 2007.396. a goodwill impairment of £111. This fair value exercise resulted in the recognition of goodwill and purchased intangibles of €2. Also. customer relationships and other intangibles were €457.2 Taken From TC_Final Presentation 2007 5 Taken from Annual Report and TUI Accounts 2008 6 Taken from Annual Report And TUI Accounts 2007 Page | 32 .9 million).3 4 See appendices 2. and they also have lower maintenance cost of their asset20.accounted for on the basis that Thomas Cook AG is the acquirer. Unlike Thomas Cook.3 and after the merger Thomas Cook Group PLC total asset raise drastically to £m 5817. has only £m 3942. They gain access to more differentiated products through strategic partnership. of which goodwill was €2. has already had £m8048. the MyTravel acquisition balance sheet has been the subject of a fair value exercise under IFRS 3. our airline in the German source market. Thomas Cook Group PLC have a more premium margin 4. are mostly because: • Aircraft-related costs of £151. As a result of its reclassification as a disposal group held for sale earlier in the year.3 million and order backlog was €49. and they only retained less than 2 million poundsterling of asset from First Choice. owns a total asset of £m 9. TUIfly has since been declassified as a 20.1 million. which are primarily attributable to the loss on disposal of 19 aircraft included in the June sale and leaseback transaction. brand names. we can see that TUI Travel PLC. Apart from that Thomas Cook announced their new “Light Asset.19 In matters of total asset. We can also see that Thomas Cook is more flexible in the recent economic recession.649. as we can see in the Balance sheet that TUI before the merger with First Choice in 2006. TUI Travel PLC Trend Keep Declining from 2006 (before the merger) until 2009.8. in which they have more differentiated products. since they have a light asset. almost twice Thomas Cook Group PLC after the Merger with MyTravel Group PLC.40 in 2007.

both companies may face bankruptcy. Page | 33 . Amortisation of business combination intangibles arising on the merger amounted to £80. TUI Travel PLC has made 17 acquisition which cost £220.9m. In conclusion.15% in Return on total Assets compared to 2. In the other hand. in which they still have some equity adjustments for the remaining 50% shareholding in Société Polynésienne Promotion Hotelière. Although both companies has made quite a lot of Acquisitions in 2007. Both were previously equity accounted entities for which a share of net liabilities had not been recognised under IAS 28 and IAS 316. Although in Overall both companies trend are declining rapidly during the year. but Thomas Cook managed to get a significant incline due to their light asset. In 2008. since the trend of TUI travel PLC continuesly declining over the years. in 2008 Thomas Cook Group PLC has Acquired 42 companies/ plants to be used as an asset and has been added to the total asset. in Return on Total Assets Margin.0m and is included within the 2008 total charge of £86.94% of Thomas Cook Group PLC. Thomas Cook is performing better. Although Thomas Cook Group PLC maintains a Light Asset model.0m in total3.disposal group held for sale. a Moroccan airline. in which cuts more cost of maintaining compared to TUI Travel PLC. and more efficient than TUI Travel PLC. TUI still on the way on finishing some acquisition in 2007. a hotel operator within the Western Europe Mainstream sector and the remaining 60% shareholding of Jet4You. and if this continues to occur. TUI Travel PLC scores 5.

34 0.10 0.10 0.05 - 0.10 £m 1.68 Return On Shareholder Equity TUI Year Ended 30/09/08 0. This ratio measures the percentage of profit earned on common stockholders' investment in the company.14 0.15 0.10 (10%) £m 178.283.25 0.30 0.00 Year Ended 30/09/06 0.14 (14%) £m371.18 0.30 Year Ended 30/09/08 0.45 0.10 (10%) £m218.42 0.4 Return on (stockholders') equity Return on stockholders' equity.18 Return On Stockholder Equity Net Income Stockholder's Equity £m 1.10 Year Ended 30/09/06 Year Ended 30/09/07 TUI Year Ended 30/09/08 Thomas Cook Year Ended 30/09/09 Page | 34 .19 0. It is defined as follows: Net Income Return on = Stockholders' Equity Stockholders' Equity Return On Shareholder Equity THOMAS COOK Year Ended 30/09/09 0.623.35 0. In theory.00 £m2.00 £m2.995.3.20 0.15 Year Ended 30/09/06 0.30 £m 281.76 £m 381.34 (34%) £m 127.42 (42%) £m 119.08 0.10 Net Income Stockholder's Equity Return On Stockholder's Equity 0.054.00 Year Ended 30/09/07 0.00 £m2.70 £m 2.19 (19%) £m497. a company attempting to maximize the wealth of it stockholders should be trying to maximize this ratio.591.20 Year Ended 30/09/07 0.708.08 (8%) £m 166.40 Return On Stockholder Equity Year Ended 30/09/09 0.40 0.18 (18%) £m 357.

10 in 2009. As we can see from the graphs.18 after 2007. Both TUI Travel PLC and Thomas Cook Group PLC.65p per share relating to the year ended 31 October 2006 (2005: 6. be recognised in the financial statements for the year ended 31 October 2007.6p).3m (2005: £24. especially Investors are looking to invest in companies that have a high ROE. Subsequent to the balance sheet date.8m will be recognised as a deduction from equity in the year ending 31 October 2007.65p) payable on 10 April 2007 to the holders of relevant shares on the register at 9 March 2007. before the merger between the tourism division of TUI AG and First Choice Limited PLC. Although we can see that Thomas Cook Group PLC manage to gain a margin of 0.4m) and will. RO(S)E trend is declining since the Merger. First Choice Limited PLC in 2006 The interim dividend in respect of the six-month period to 30 April 2006 of 2.1 Return on Stockholder Equity Analysis. makes a total dividend of 7. until they both meet at the same point of margin 0. The final ordinary dividend of 5. which means they are high and growing.4.4p per share. There are quite significant changes in equity. the Directors have proposed a final dividend of 5.21 21 Taken from First Choice PLC Annual Report 2006 Page | 35 .25p per share. after approval by shareholders. TUI Travel PLC trend seems to keep declining. 2006 In 2006. The final proposed dividend amounts to £28. together with the interim dividend of 2.3. in which we can see by the dividends paid by both company to their shareholders each year.25p per share was paid on 1 November 2006 and this dividend of £11.4p per share (2005: 4. This trend certainly does not look good.

the Group‟s captive insurance company.8m (2005: £53. At an Extraordinary General Meeting on 26 May 2006.0m) of cash held by White Horse Insurance Ireland Limited. Included within the above balances is an amount of £66.22. we have taken the necessary measures to facilitate the resumption of dividend payments. In 2007 First Choice Directors have approved the company has paid an interim divdend of 24. The Company is now in a position to pay dividends out of distributable profits earned from that date onwards. On 28 June 2006. earnings per share before exceptional items and amortisation of business 22 23 Taken from My Travel PLC Annual Report 2006 See appendices 2.643p per share (2006:5.2m) held within escrow accounts in the United States and Canada in accordance with local regulatory requirements. the Board would expect to be in a position in December 2007 to propose the resumption of regular payments. Thomas Cook „s basic and diluted earnings per share for the year was € cents 33 (2006: € cents 35).4m (2005: £56. regulatory approval is being sought for a loan of £11. TUI Travel PLC 24 Also in2007.2m to be paid in cash from White Horse Insurance Ireland Limited to MyTravel Group plc. My Travel PLC has was not doing well in matters of financial in the past 3 years since 2003 until 2006 before the merger23.4p) on Taken From Thomas Cook Annual Report 2007 February 2008 to the company‟s parent company. Also included within the above balances is an amount of £55. These balances are considered to be restricted.6m and a dividend of £3.With MyTravel PLC have just gone out of difficult times with loss more than Board was unable to pay a dividend. To allow a more like-for-like comparison to the prior year. a special resolution was passed by the Company‟s shareholders to reduce the Company‟s share capital by way of a reduction in the share premium account.3 24 Taken from First Choice PLC Financial Statement 2006 Page | 36 . If the Board‟s expectations for 2007 are achieved. Since then. however. Before the merger with Thomas Cook. this reduction of capital was confirmed by an order of the High Court.

As a result. No interim dividend was paid during the period.html Page | 37 . Based on the adjusted earnings per share figure noted above. together with the interim dividend of 3. and subject to shareholder approval at. this equates to a 41% payout ratio for the full year. Adjustments have been made to reflect a normalised preexceptional tax charge. brings the total dividend in respect of the period to 9. the Annual General Meeting to be held on 19 March 2009. the number of shares in issue at the end of the period was taken due to the distortion caused by the merger. before exceptional items and amortisation of business Taken From Thomas Cook Group PLC Annual Report 2008 combination intangibles. Pro adjusted earnings share has been calculated using the pro forma profit for the period. The Board is recommending a final dividend of 6.combination intangibles has also been calculated.5 million. For the prior year period. However. for payment after. The Directors recommend a final dividend of 5p per ordinary share.25 pence paid on 5 September 2008.1 pence in the pro forma prior forma per year period. This was € cents 54 for 2007 (2006: € cents 25). This.tui-group. divided by the weighted average number of shares in issue. management believes that the adjusted earnings per share figures included within the pro forma financial results and performance review section of this report are a better measure of return.25 2008 Thomas Cook pro forma adjusted earnings per share for 2008 the period was 24. Thomas Cook Group PLC‟s profit after taxation for the period ended 31 October 2007 amounted to €225. 25 http://www. it should be noted that the earnings per share figures noted here are impacted by the weighted average number of shares in issue which are significantly lower for the comparative period due to the nature of the merger transaction.1 pence compared with 17.5 pence per share.com/fp/en/management_report/highlights_of_2007.75 pence.

may do so by contacting Equiniti direct on 0871 384 2030.9p per share.4p per share. A dividend reinvestment plan is in operation. the Directors have proposed a final dividend of 6.9p per share (2007: initial interim dividend of 5.8p per share. The final proposed dividend amounts to £76. The last day for election for the final proposed dividend is 23 March 2009 and any requests should be made in good time ahead of that date. Those shareholders who have not elected to participate in this plan.9m will be recognised as a deduction from equity in the year ending 30 September 2009.8p was paid on the 1 October 2008 an d this dividend of £30.26 2009 26 Taken From TUI Travel PLC Annual Report and Accounts 2008 Page | 38 .5p per share. and who would like to participate with respect to the 2008 final dividend. which taken together with the dividend paid prior to the business combination would result in a total dividend for the year ended September 2007 of 8. Subsequent to the balance sheet date.7p per share relating to the year ended 30 September 2008. The dividend for the 9-month period ended 30 September 2007 comprises an interim dividend of 2. TUI Travel PLC interim dividend in respect of the 6month period to 31 March 2008 of 2. be recognized in the consolidated financial statements for the year ending 30 September 2009. The final ordinary dividend of 6.In 2008.3m and will. after approval by shareholders.9p per share) payable on 6 April 2009 to the holders of relevant shares on the register at 13 March 2009. together with the interim dividend of 2. makes a total dividend of 9.

the strength of our financial model and our commitment to delivering value to shareholders.75 pence per share. an increase of 10% on the 2008 pro forma figure. TUI travel PLC interim dividend in respect of the year ended 30 September 2009 of 3.4p. This recommendation reflects the Group‟s financial achievement. The Board is recommending a final dividend of 7. which when combined with the interim dividend of 3.7p per share (2008: final dividend of 6. The adjusted diluted earnings per share for the year was 26.2p (2008 pro forma: 24. together with the interim dividend of 3. paying between 40% and 50% of adjusted earnings by way of dividend. Once approved.7p per share.9p and 1. the final dividend will be payable on 8 April 2010 to holders of relevant shares registered on 19 March 2010.0 pence per share.6p).75 pence per share paid on 4 September 2009.7p per share relating to the year ended 30 September 2009.1p). The final proposed dividend amounts to £85m and will. The basic and diluted statutory earnings per share was 1.0p per share.0p per share. makes a total dividend of 10. the Directors have proposed a final dividend of 7. The basic earnings per share before exceptional items (“adjusted earnings per share”) for the year was 26.0p per share was paid on 1 October 2009 and this dividend of £33m will be recognized as a deduction from equity in the year ending 30 September 2010.8p respectively (2008 statutory: basic and diluted of 4. The total dividend for the year represents a payout of 41% of adjusted diluted earnings per share and is in line with our policy.27 In 2009.9p per share) payable on 1 April 2010 to the holders of relevant shares on the register at 12 March 2010. which remains to increase dividends progressively. makes atotal dividend for the year of 10. after approval by shareholders. 27 Taken From TUI Travel PLC Annual Report and Accounts 2009 Page | 39 . The final ordinary dividend of 7. be recognized in the consolidated financial statements for the year ending 30 September 2010. Subsequent to the balance sheet date. Thomas Cook board is recommending a final dividend of 7. for payment after.In 2009.

Thomas Cook is more attractive to investor than TUI. brings the total dividend in respect of the financial year to 10.5% in the prior year. since Thomas Cook ROE is higher. the Annual General Meeting to be held on 25 March 2010. This.28 Thomas Cook performs better in return on stockholder‟s equity.75p per share. We can conclude that Thomas Cook Group is more efficient even only slightly than TUI Travel. 28 Taken From Thomas Cook Annual Report 2009 Page | 40 . which means Thomas Cook are really well on reinvesting earnings to generate additional earnings. Based on the adjusted diluted earnings per share figure noted above.75p. this equates to a 41.and subject to shareholder approval at. together with the interim dividend of 3.0% payout ratio for the full year compared with a payout ratio of 40.

840.30 Current Ratio Current Assets Current Liabilities Year Ended 30/09/09 0.62 Year Ended 30/09/06 Year Ended 30/09/07 Year Ended 30/09/08 TUI Year Ended 30/09/09 Thomas Cook Page | 41 .71 0.749.60 0.542.3.00 £m 979.400.80 0.71 0.30 £m 4.20 £m 3.682.85 0. The current ratio measures the extent to which the claims of short-term creditors are covered by assets that can be quickly converted into cash.58 0.322.20 - 0.58 £m 572.00 £m 5.66 0.85 £m 3.60 £m 4.56 0.1 Current ratio Current ratio.56 £m 2.40 0. Most companies should have a ratio of at least 1.534.561.80 £m 2.57 £m 3.166.30 £m 4.00 Pro Forma Year Ended 30/09/06 0.00 0.40 £m 1.30 Current Ratio TUI Year Ended Year Ended 30/09/08 30/09/07 0.37 £m 1.62 £m 2. The ratio is defined as follows: Current Ratio = Current Assets Current Liabilities Current Ratio THOMAS COOK Year Ended Year Ended 30/09/08 30/09/07 0.40 0.54 First Choice PLC Current Ratio Current Assets Current Liabilities Year Ended 30/09/09 0.151.20 £m 1.00 Year Ended 30/09/06 0.681.091. because failure to meet these commitments can lead to bankruptcy.5 Liquidity Ratios 3.078.55 0.5.55 0.30 Current Ratio 1.67 £m 934.

the objective of the funds it to safeguard the framework liquidity of general corporate financing.6 7 See appendices 2. and TUI travel PLC current ratio. with a further € 150 million raised through private placements. a notable increase from 2007 is in the trade and other receivables and also assets classified as held for sale which raise significantly from £ 88.9 million (2007).4. TUI ratio is higher than Thomas Cook‟s.html http://www. and TUI Travel PLC shows that both of these two company is not a very “liquid” company.8 million. and also Budget Travel Limited 5.5. and their current liability for the year is far greater than their current assets.2 Current Ratio Analysis The current ratio of both Thomas Cook Group PLC.9 million (2006) to only £ 11. TUI Travel PLC now performs these functions for the tourism division in line with the unchanged risk policy of the Group. which in 2007 the balance sheet between TUI Tourism Division and First Choice has to be combined.5.com/1258/current_ratio.30 2007 TUI Travel PLC Current Asset in 2007 was lower than the previous year before the merger. this is because there are a significant decrease in current asset. and also the debt of the consolidated balance sheet of TUI has to be added with the debt of First Choice Group PLC.investorwords. there has been a major decrease from £ 298. This amount is 80% accounted from sale of aircraft from Jet4You.com/fp/en/management_report/highlights_of_2007.html 31. especially for a one year period. 32 Other than that. Total current liabilities of TUI Travel PLC also increased approximately £ 500 million from 2006 to 2007 which mainly from trade and other payables. With TUI Tourism Division merged with First Choice PLC. The graph clearly shows that these two companies‟ current ratio are below one.0 million to £156. while TUI AG continues to hold this function for all other business activities of the Group. also cash management that was managed by TUI AG has to be splitted. There were € 694 million funds raised from convertible bonds.29 Between Thomas Cook Group PLC. which means these two companies are not so good in their short term financial standing.3 Thomas Cook Annual Report 2007 Page | 42 . especially in cash and cash equivalents31. The increase was highly on 29 30 Current Ratio Definition: http://www.tui-group. other items in the 2007 current asset are increasing. which after the merger between TUI tourism division and First Choice. financial risk management system.3.

2 million) and unquoted (€37.6 million) securities and other assets (€5. which raise from only £ 79. The credit risk in respect of direct receivables from customers is limited as payment is required in full before the services are provided. and TUI travel PLC receives £ 240 million more from clients which received in advance 6.7 The average credit period taken on invoicing of leisure travel services is nine days (2006: seven days).7 million (2006: €72. this is mainly due to Current asset securities of €366. No interest is charged on the receivables.8 million to £ 233. In the case of travel services sold by third-party agents. There is a credit risk in respect of the continued operation of those suppliers during those periods. Deposits and prepayments include amounts paid in advance to suppliers of hotel and other services in order to guarantee the provision of those supplies and historically have covered periods from one to 36 months in advance.7 million) which are also classified as held-for-trading investments.creditors. Deposits and prepayments also include €78.1 million) of deposits on aircraft lease arrangements which are primarily attributable to the UK Airline. The fund is classified as held-for-trading investments and includes corporate and government bonds (€239.7 million) include €292.4 million (2006: €40. Page | 43 . quoted (€10.3 million in 2007. has a huge increase of current asset in 2007 after the merger.1 million).4 million). but this risk is also limited because of the relatively short period of credit. Securities also include money market deposits with a maturity of greater than three months of €74. the credit risk depends on the creditworthiness of those third parties. The Group‟s current policy is that deposits and prepayments will normally only be made for periods of up to 12 months in advance.4 million (2006: €72.3 million (2006: nil) in relation to a managed investment fund established to optimize the utilization of the Group‟s surplus liquidity. Thomas Cook in the other hand.

3 million (2006: nil) in relation to a managed investment fund established to optimise the utilisation of the Group‟s surplus liquidity. which causes interest rate swaps raise drastically form £69.Securities include money market securities amounting to €5.34 2008 In 2008.6 million (2006: €2.4 million (2006: €72. based on previous experience. The average credit period taken on invoicing of leisure travel services is eleven days (2007: nine days). These loans are interest bearing at rates based on Euribor and are unsecured. Loans include advances of €2.2 million) and unquoted (€37.3. More than £ 200 million on current asset derived from Trade and Other receivable. An allowance for impairment is made where there is an identified loss event which. this is due to a slight raise of the current liabilities of £ 1200 million.7 million) which are also classified as held-for-trading investments.7 million) include €292.5 million.4 Taken From Thomas Cook Annual Report and Accounts 2007. The credit risk in respect of direct 33 34.2 million (2006: €54. Thomas Cook current ratio dropped from 0. and only £ 500 million on asset. which is almost 10 times from 20074. Thomas Cook did not have any current assets for sale in 2007.1 million).1 million to £ 523. see appendices 2.3 see appendices 2. is evidence of a reduction in the recoverability of the cash flows.6 million) securities and other assets (€5. Current asset securities of €366. quoted (€10.6 million) to two hotel companies in which the Group has a participating interest.55.1 million).62 to 0.4 million).2 million) purchased as collateral against liabilities arising from part-time retirement contracts at Thomas Cook AG.3 Page | 44 . The fund is classifi ed as held-for-trading investments and includes corporate and government bonds (€239.33. No interest is charged on the receivables.7 million (2006: €72.5 million (2006: €5. The amounts presented in the balance sheet are net of allowances for doubtful receivables of €73. in which TUI Travel PLC has to sell quite a lot of asset. Securities also include money market deposits with a maturity of greater than three months of €74. and around £ 163 million in financial derivative35 Although the changes in the liabilities is 90% affected by the raise of the foreign exchange.

Deposits and prepayments include amounts paid in advance to suppliers of hotel and other services in order to guarantee the provision of those supplies and historically have covered periods from 1 to 24 months in advance. In the case of travel services sold by third party agents.1m quoted securities.6m) include £129.receivables from customers is limited as payment is required in full before the services are provided. Deposits and prepayments also include £63. Securities in the prior year also included money market deposits with a maturity of greater than three months of £51. classified as held-for-trading investments. The fund is classified as held-for-trading investments and includes corporate and government bonds of £129.7m) of deposits on aircraft lease arrangements which are primarily attributable to the UK Airline.8m) purchased as collateral against liabilities arising from parttime retirement contracts at Thomas Cook AG.9m).2m unquoted securities and £3.7m (2007: £3.3m (2007: £54.6m other assets. the credit risk depends on the credit-worthiness of those third parties. but this risk is also limited because of the relatively short period of credit. which are classified as available-for-sale financial assets.8m. In the prior year there was also £7. Securities include money market securities amounting to £3. Page | 45 .2m (2007: £166.2m (2007: £255. The Group‟s current policy is that deposits and prepayments will normally only be made forperiods of up to twelve months in advance. There is a credit risk in respect of the continued operation of those suppliers during those periods.8m) in relation to a managed investment fund established to optimise the utilisation of the Group‟s surplus liquidity. Current asset securities of £129. £26.2m (2007: £203.

see appendices 2. No interest is charged on the receivables. and £0.3 Page | 46 . the credit risk depends on the credit worthiness of those third parties. Both TUI and Thomas Cook current asset is declining. and a decrease of £50 million in other receivables. but this risk is also limited because of the 36 37 Taken from Thomas Cook Annual Report and Accounts 2008. current ratio is declining. see appendices 2.0m) of cash held by White Horse Insurance Ireland Limited. euro and other currencies for the purpose of settling current liabilities as well as balances arising from agency collection on behalf of the Group‟s travel agencies. Thomas Cook‟s current asset in 2009 were lower than 2008. which largely comprise bank balances denominated in sterling. Also included within the above balances is an amount of £13. Included within the above balances is an amount of £46. In the case of travel services sold by third-party agents.36 2009 For the year 2009 we can see that both TUI Travel PLC and Thomas Cook Group PLC.2 million and in 2009 is none.6m (2008: £55. These balances are considered to be restricted37.2m (2008: £56. in which this was caused by a decrease in cash and cash equivalent. Another decrease in trade and other receivables in 2009 which constitute of £ 90 million. but both of their liabilities are raising. These loans are interest bearing at rates based on Euribor and are unsecured.4m (2008: £15.Loans include advances of £2.7m) held in other securities.71 and also Thomas Cook Group PLC declined from 0. The credit risk in respect of direct receivables from customers is limited as payment is required in full before the services are provided. mostly from securities.40.56 declined from 0.8m) to two hotel companies in which the Group has a participating interest. The average credit period taken on invoicing of leisure travel services is 14 days (2008: 11 days). This makes the current ratio declined drastically.3 Taken from Thomas Cook Annual Report and Accounts 2009.1m (2007: £1. the Group‟s captive insurance company. TUI Travel PLC Ratio in 2009 is 0. which in 2007 was £129.4m) held within escrow accounts in the United States and Canada in respect of local regulatory requirements.55 to 0.

the Group had repaid a total of €75m of term loans.0m (2008: £63. The facility comprises term loan. These securities were disposed of during the current year. There is a credit risk in respect of the continued operation of those suppliers during those periods. revolving credit and bonding facilities. which are classified as available for sale financial assets.0m (2008: £3. Deposits and prepayments include amounts paid in advance to suppliers of hotel and other services in order to guarantee the provision of those supplies and historically have covered periods from 1 to 24 months in advance. the Group entered into a €1.38 In May 2008. current asset securities of £129.7m) purchased as collateral against liabilities arising from part-time retirement contracts at Thomas Cook AG. As at 30 September 2009. These loans were interest bearing at rates based on Euribor and were unsecured. 38 Taken from Thomas Cook Annual Report and Accounts 2009. The fund was classified as held-for-trading investments and consisted of corporate and government bonds. The advances were settled in full during the year. the Group entered into an agreement with its lenders to change the designation of this portion of the facility to enable it to be used to meet the aircraft refinancing needs of the Group. In the prior period.3 Page | 47 .2m consisted of a managed investment fund established to optimise the utilisation of the Group‟s surplus liquidity. Deposits and prepayments also include £65. During the year. €320m of the revolving credit facilities were originally made available for the Group in respect of the proposed transaction between Condor and Air Berlin. Securities include money market securities amounting to £4. This re-designation became effective on 1 October 2009 and the facilities were fully available to the Group from this date. In the prior period.8bn committed credit facility maturing in May 2011. Amounts are repayable under the term loan facility at fixed intervals with a final bullet payment at maturity. The Group‟s current policy is that deposits and prepayments will normally only be made for periods of up to twelve months in advance. see appendices 2.1m to two hotel companies in which the Group had a anticipating interest.relatively short period of credit. loans included advances of £2.3m) of deposits on aircraft lease arrangements which are primarily attributable to the UK Airline.

0m). For TUI Travel PLC. For items maturing in less than one year. Mainstream The Canadian is business classified as held for sale on the basis of the announced joint venture transaction with Sunwing Travel Group Inc. The fair values quoted were determined on the basis of the interest rates for the corresponding terms to maturity or repayment as at the period end. The disposal group assets and liabilities held for sale comprise the Canadian Mainstream business at 30 September 2009 and Société d‟Investissement Aérien S. a decrease of £ 380 in cash and cash equivalent.0m is £943.3 Page | 48 . The drop in the current asset can be explained by a decrease of £ 120 million in trade and other receivables.The Directors consider that the fair value of the Group‟s borrowings with a carrying value of £940.9m (2008: carrying value £772. in 2009 the current asset drops £ 500 million but the current liabilities raise for more than £ 500 million. the Directors feel that the fair value is equal to the carrying amount39. fair value £770. Jet4You is included within the Western Europe segment and the Canadian Mainstream Business is included in the Northern Region. Other current investments disclosed on the consolidated balance sheet comprise deposit balances held to meet regulatory requirements with a term exceeding three months40. TUI Travel PLC decrease in current liabilities is also because a significant decrease in asset held for sale which in 2008 was more than £ 135 million to only £ 67 million. see appendices 2. Cash and cash equivalents includes £60m (2008: £46m) that is not available for immediate use by the Group.2. Jet4You is presented as held for sale at the current and or 39 40. This is made up of monies held to meet regulatory requirements plus cash balances on short term deposits held on a restricted basis by the Group‟s captive insurance funds as part of their ongoing operations.1m.3 Taken from Thomas Cook Annual Report and Accounts 2009.3 Taken from TUI Travel PLC annual Report 2009. see appendices 2. (Jet4You) at 30 September 2009 and 30 September 2008.A.

A further put option at a fixed price with no time limit has been written by the Group during the year to the same minority shareholder for the remaining 10% shareholding3.year end. Although both companies have borrowings. plant and equipment assets at the lower of their carrying value and fair value less costs to sell. We can see that in this case (current ratio) TUI performs better than Thomas Cook Group PLC since Thomas Cook seems to be cutting down on cash at hand. The remainder of this put option over 20% of the shares may be exercised at any time until 2015. The four aircraft were therefore classified as held for sale at 30 September 2008 until their disposal for a total of £90min the current year. In conclusion. The disposal proceeds are included within „Proceeds from sale of property. Aircraft held for sale relate to the Northern Europe and Central Europe Mainstream segments. Thomas Cook‟s loans is twice as much from TUI Travel PLC for 4 years. which make Thomas Cook‟s current asset decline drastically. four aircraft were purchased but were not sold and leased back until the first quarter of the current year ended 30 September 2009. which they have to increased their shareholding from 51% to 70% on the exercise of part of one of the options. Beside of that. and from shareholders. an impairment charge of £1m (2008: £31m) has been taken to record these property. there is a huge increase in borrowings in 2009 in TUI Travel PLC is from £ 99 million to £ 327 million. plant and equipment‟ on the consolidated cash flow statement 2. In the year ended 30 September 2009. Page | 49 . Especially TUI Travel have to cover the losses and pay the shareholders. During the prior year. The impairment charge is included within separately disclosed restructuring expenses and aircraft items (Note 3). both companies in 2009 are trying to cover the expenses they have made from the years before by borrowing from banks. based on the active disposal process for the business which is progressing and which the Directors expect to complete within 12 months.

481.00 £5. The debt-to-asset ratio is the most direct measure of the extent to which borrowed funds have been used to finance a company's investments.122.00 £ 4.800.68% 11.500.00 £k 9. http://www.uk/company-tui-travel---1uTT.903.00 £m 6.16% £ 3..46% 12.3.00 Debts-to-assets ratio TUI Year Ended Year Ended Year Ended 30/09/09 30/09/08 30/09/07 12.00 £m 6.68% 12.1 Debt-to-assets ratio41 Debt-to-assets ratio.6.46% 17.16% 17.selftrade.737.78% 13.00 £ 1.00% 10.997.518.88% 23.L# Page | 50 .00 Debts to Asset .29% 25.386.639.uk/quotethomas-cook---1uTCG.600.00% 18.410.689.938.000.selftrade.00 £6.co.500.co.00 £ 3.845.396.00 £ 1. It is defined as follows: Debt-to-Assets Ratio = Total Debt Total Assets Debts-to-assets ratio Total Debt Total Assets Debts-to-assets ratio Total Debt Total Assets Debts-to-assets ratio THOMAS COOK Year Ended Year Ended Year Ended Year Ended 30/09/09 30/09/08 30/09/07 30/09/06 18.480.6 Leverage Ratios 3.L .00% Year Ended 30/09/06 Year Ended 30/09/07 TUI Year Ended 30/09/08 Thomas Cook Year Ended 30/09/09 0.Ratio 23.88% 11.00 £k 8.00% 5.000.00% 15.00% 41 Data from http://www.29% 12.00 £k9.333.00 £6.62% 13.62% 20.78% £ 3.

a significant change. Companies with high debt/asset ratios are said to be "highly leveraged. the major changes has been explained in details in return on total asset analysis.3. If the ratio less than one.68% from 11. The debt to asset ratio for Thomas Cook and for TUI Travel PLC for the last 4 years. in which the ratio were mostly affected by the loans that TUI Travel PLC made. These companies will be in danger if their creditors start to demand a repayment of debt. We can see that Thomas Cook Group PLC in 2006 to t2007debt to asset ratio was declining slightly.html Page | 51 . TUI Travel PLC still better than Thomas Cook in this matter.88% in 2008.46% in 2009. is rapidly changing. both Thomas Cook and TUI Travel PLC investments on assets are financed through debts. most of the company‟s assets are financed through equity.62% in 2009.com/5497/debt_asset_ratio. we can say that Thomas Cook and TUI Travel PLC are highly leveraged since most of the company‟s assets are financed through debts 42. but in 2008 the ratio drastically increase to 17.6.2 Debt to Asset Ratio analysis The debt to ratio sows the proportion of a company‟s assets which are financed through debt. TUI Travel PLC Debt to asset ratio declined for 10% from 23. and paid. and steadily declining to 12. The major changes that happens in terms of total assets has been explained in return on total asset analysis for Thomas Cook Group PLC. In brief.16% in 2007 to merely 13. 42 http://www.29% and continuously grew to 18." and could be in danger if creditors start to demand repayment of debt. If the ratio is greater than one most of the company's assets are financed through debt.investorwords. since TUI has less debt than Thomas Cook. Unlike Thomas Cook Group PLC.Although both companies are highly in debt. since the margin are quite high.

L ..903.283. 6.48 0.480.uk/quotethomas-cook---1uTCG.uk/company-tui-travel---1uTT.80 0.00 £ m 2.00 £m 6.00 Debts to Equity .727.20 Debts-to-equity ratio TUI Year Ended Year Ended Year Ended 30/09/09 30/09/08 30/09/07 0.49 0. It is defined as follows: Debt-to-Equity Ratio = Total Debt Total Equity Debts-to-equity ratio Total Debt / Net Debt Total Equity Debts-to-equity ratio Total Debt / Net Debt Total Equity Debts-to-equity ratio THOMAS COOK Year Ended Year Ended Year Ended Year Ended 30/09/09 30/09/08 30/09/07 30/09/06 0. This is perhaps the most widely used measure of a company's leverage.20 1. http://www.29 0.062.00 £m 6.00 0.74% 59.591.Ratio 1.00 £m 3.88% 83.3.60 0.20 0.co.500.co.84 0.40 £ m 2.60 0.20 £m 2.008.396.49 0.72 71.40 1.40 0.47% 71.00 £m 2.00 £m 3.25% 29.36 Year Ended 31/10/06 Year Ended 31/10/07 Year Ended 30/09/08 TUI Year Ended 30/09/09 0.623.59 0.000.00 £m 1.000.L# Page | 52 .71% £m 6.737.410.83 49.41% 48.72 0.72 0.29 0.3 Debt-to-equity ratio43 Debt-to-equity ratio. The debt-to-equity ratio indicates the balance between debt and equity in a company's capital structure.00 £m 2.845.49 0.396.74% £m 3.selftrade.727.00 Thomas Cook 43 Data from http://www.00 £m 1.75 £ m1.selftrade.

which has been explained in detail in the return on total asset analysis.59 in 2008. TUI Travel PLC performs better in debts to equity ratio. since TUI Travel PLC main objective is to retain assets. This significant changes in the debt is to complete some acquisition in the year. TUI reduces their debt until almost half (0.49 from 0.4 Debts to Equity Ratio Analysis Debt to equity measures a company‟s financial leverage. In 2008. In brief. and Thomas Cook Group PLC uses more equity than debt to finance their investment. due to the additional interest that has to be paid out for the debt44. but in return. TUI Travel PLC managed to keep their margin to be stable.29 to 0. 44 http://www. and Thomas Cook‟s goal was to reach as high as possible on gross profit margin.html Page | 53 . in which Thomas Cook has earned more debt in the following year Thomas Cook raise on debt to equity margin is mainly because of their total equity value drops.3. they have to pay debts and borrowings which will need to be paid in 1 to 10 years time. especially in times of rising interest rates. which we have explained in Return on Stockholder Equity analysis.6. Debt/equity ratio is equal to longterm debt divided by common shareholders' equity. Investing in a company with a higher debt/equity ratio may be riskier.com/1316/debt_equity_ratio. From the graph we can see that after the merger (2007) TUI Travel PLC financed their investment through debt. and there has been a significant decrease in the cash at hand in their current ratio. which TUI did not use as much debt as TUI to invest on their assets. TUI Travel PLC uses their shareholder equity more to invest on the assets they have. Typically the data from the prior fiscal year is used in the calculation.investorwords. In 2009.84) but Thomas Cook debt has raised from 0.

7 Financial Analysis Summary Page | 54 .3.

TUI TRAVEL PLC THOMAS COOK GROUP PLC Page | 55 .

selftrade.co.L# Page | 56 .uk/quote-thomas-cook---1uTCG.TUI TRAVEL PLC THOMAS COOK GROUP PLC Taken From : http://www.

These companies will be in danger if their creditors start to demand a repayment of debt. Although both companies are highly in debt. Page | 57 . And it also means that TUI Travel is more liquid than Thomas Cook Group PLC.3. both gross profit margin and net profit margin. they have to pay debts and borrowings which will need to be paid in 1 to 10 years time. We can conclude that Thomas Cook Group is more efficient even only slightly than TUI Travel. and Thomas Cook‟s goal was to reach as high as possible on gross profit margin. TUI Travel PLC performs better in debts to equity ratio. but in return. in fact they are losing money each year and more every year since they merged with First Choice. since Thomas Cook ROE is higher. Although TUI Travel PLC is not profitable compared to Thomas Cook. We can also see that the profit that Thomas Cook made is much more than TUI Travel. and also the return on Equity is lower. since TUI Travel PLC main objective is to retain assets. Thomas Cook also performs better in return on stockholder‟s equity in which Thomas Cook are really well on reinvesting earnings to generate additional earnings. since TUI has less debt than Thomas Cook. in which TUI Travel return on total assets margin are declining steadily from 2007 to 2009.1 Financial Analysis Conclusion From the financial point of view. and TUI Travel is relatively better in short term financial standing. TUI Travel PLC uses their shareholder equity more to invest on the assets they have.7. TUI Travel PLC still better than Thomas Cook in this matter. Thomas Cook also had quite a lot of debt. mainly long term. but Since this margin is ignoring TUI Travel liabilities. which makes Thomas Cook is more profitable than TUI Travel PLC. which TUI did not use as much debt as TUI to invest on their assets. TUI Travel had not been very profitable since the last 4 years. Thomas Cook is more attractive to investor than TUI. Thomas Cook scores better in profit margin. our group has made a conclusion that Thomas Cook Group PLC performs better than TUI Travel PLC in some very essential part. TUI Travel have a higher current asset ratio compared to Thomas Cook. Thomas Cook also performs slightly better than TUI Travel in terms of return on total assets. and is more efficient on meeting short term debt obligations.

and invest in Conversely. why it exists.1. Being confident about the reputations as one of the market leaders in Tourism industry. At a minimum. “TUI Travel PLC does not have a Mission Statement. and describe the geographical location in which company operate. Under the global vision “WE GO FURTHER TO MAKE DREAMS COME TRUE”.Chapter 4: Marketing 4. • Further we go to make dreams come true • To be the best travel company in the world to travel with. The differences in the Thomas Cook ´s Mission Statements in different divisions are related on its flexible business models and concentrated marketing strategy for every different geography market. a mission statement should define who primary customers are.tuitravelplc. A mission statement also should be the guideline of the company´s marketing orientation. A mission statement defines what an organization is. markets and competitive advantages. Specializing mission statement for each business divisors.com/tui/pages/investors/shareholderinfo/faqs Page | 58 . the Leader of TUI believed it is not essential to have a sentence to describe company's function. a mission statement is the fundamental guideline of the company. Northern Europe. which have already become the famous concepts. Thomas Cook states itself with four different missions based on five main divisions: UK & Ireland. We have a stated strategy which is to create superior shareholder value by being the world’s leading leisure travel group providing customers with a wide choice of differentiated and flexible travel experiences to meet their changing needs To enable us to achieve this goal we have identified four key strategic imperatives which are linked to our KPIs. Mission statement: “A Mission Statement of the organization’s purpose – what it wants to accomplish in the larger environment”45. identify the products and services the company produce. UK & Ireland Continental Europe and Airlines Germany Northern Europe North America • Exceptional Service From Exceptional People • To perfect the personal leisure experience. 45 46 TUI Travel Annual Report 2009 FAQS. work for. and state its business goals and philosophies. Continental Europe and Airlines Germany. North America. In matter of Mission Statement. TUI travel plc does not public any mission statement. Retrieved from http://www. TUI Travel plc. its reason for being. TUI Travel PLC and Thomas Cook Group PLC have different perspectives.”46 In our group opinion.

2. Cruises. an international cooperation. quality  Speed of decision making and implementation  Industry leading margins  Tailored business model in each market  Strong multi-channel distribution capability  Asset light model improving  Strong and financial position  Stable and managementfriendly shareholders.  Unique media methods in marketing (TUI song: Let´s make people smile).  Unique concept hotels.  Positive customer feedback: 97% customer satisfaction. Weakness  Company registered a net loss of EUR 142 million in 2008 (Annual Report 2008)  Major reduction in the  Has no customer retention policy. and expand and develop business in the new markets. Egypt and Rhodes. investors but also the company´s employees. in the Thomas Cook  Scale (22m passengers out of 21 source markets). Hotels and Resorts. 4.  Delivering high customers services.  Has little or outside of Europe.Thomas Cook creates itself more advantages in communication with not only customers.33% holding in Hapag-Lloyd). All of these elements are extremely critical in strengthen the firms ‘position in the core markets.  Strong multi-channels distribution focusing on online sales. and major share holder in Container shipping (43.  Portfolio of strong brands  Be a part of TUI AG. SWOT Analysis: TUI Travel plc Strengths  Market leader tourism industry. 96% would recommend TCNE.  No1 market share of Canaries. which is operating business in Travel. Majorca.  25years average industry experience. Turkey. no scope Page | 59 .  Strong partnerships.

the focus on price and the focus on convenience (frequent flights.  Business expansion through further acquisition and mergers. flexibility and business focus (such as frequent flyer programmes) make the low-cost model unappealing for most business travelers.volume of holiday packages because of recession and financial uncertainties  Heavy Fixed Assets lead to the lack of flexibility and reduce the competition ability when the economic climate has high level of uncertainty.  The two drivers of growth. Differentiation from there remains to be difficult. Page | 60 .  Experts predict great potential for future growth in the next years.  The current recession is favorable as people and businesses are more costconscious. more nearby airports) are reaching their natural limits.  Lack of service. few connections.  More full-service airlines may withdraw from the regional market to focus on more profitable long-haul routes leaving the market to the lowcost operators.  Easy Jet’s own success makes it difficult to recruit and train staff quickly enough Opportunities  Expansion in developing markets such as India and China. (Fixed assets cover 34% of total assets)  Maintaining too many different brand names makes the company’s marketing and management expenses become too high.  Recovery signs of the world economic after economic recession.

Threats  Changing consumer behavior in his global economic recession can influence company’s strategy. which include business objective and marketing objective to guide management. Maximize value of mainstream: • Product mix • Leverage brands • Multi-channel distribution • Capacity reduction • Reduced costs via flexibility • Maximize consolidation benefits • Further consolidation  Leading independent travel Page | 61  . 4. The strategic objective: “STRENGTHENING OUR BUSINESS AND INVESTING FOR GROWTH” is developed in four growth drivers: Maximize value of mainstream. Based on the company global vision. are more flexible in business models and strategies. and Capture growth and value through mergers & acquisitions and partnerships.  Increased competition is likely to lead to greater difficulties in demanding incentives from communities.3. Thomas Cook’s strategic goals are built around our vision of going further to make dreams come true.  Competitors. Become the leading UK travel-related financial services provider. both Thomas Cook and TUI set up the clear clear strategic goals. such as Thomas Cook.  Competition is likely to intensify. given the saturated market and the shortage of other options.  Threat of losing consumers who want a low-cost packagers because company’s focus on luxury hotels. Strategic Objectives: The company’s statement needs to be turned into the Strategic Objectives. Become leading independent travel provider.  Companies cut on business travel in times of economic downturn and because of new time-consuming security measures travel substitutes like videoconferencing are introduced.

Distribution & Brands. which is emphasized on the values of the shareholders and customers. “Creating superior shareholder value by being the world’s leading leisure travel group providing customers with the widest choice of differentiated and flexible travel experiences to meet their changing needs. but multi-channel • FX price proposition • Insurance regulatory environment  M&A opportunities in the following areas: • Developing markets • Consolidation in mature markets • Capture further value in profitable products • Independent travel • Financial Services TUI travel plc builds up itself a more specific strategic goal. Effectiveness and Growth & Capital Allocation Page | 62 . Insurance & Credit Card • Cross selling • High street led. People & Operational.” TUI’s strategy is focused on four areas – Product & Content.provider: • Substantial business today • ‘One-stop-shop’ proposition • E-commerce led via website. but multi-channel • Wholesale and retail distribution • Emerging markets growth  Leading UK travel-related financial services provider: • Network expansion UK • TC brand • FX.

 Imperative 3: People & Operational Effectiveness • People are key to success. deliver customer satisfaction.  Imperative 2: Distribution & Brands • Highly trusted brands that provide value and quality: highly trusted brands provide excellent value for money and drive customer loyalty and repeat bookings. • Integration progressing well with total synergies upgraded to £200m. in each source market.2%. In return. • High customer retention and repeat booking rates. the use of the internet as a research and booking tool and by the utilisation of call centres. and a convenient range of booking options. and build strong customer relationship. • Underlying operating profit up 11% to £443m. • Growth plans are progressing well in Russia & CIS. which aims to reduce costs by building controlled distribution through the efficient operation of retail shops. TUI considers the customers values and relationships as the critical element. • Underlying operating profit margin up 30 basis points from 2. • Earlier booking trends: increases yields and removes pressure in the late market. TUI can improve its sale Page | 63 . Each source market has its own distribution strategy. • Broadening customer choice: provide customers with a wide choice of holiday options that meet their preferences. Imperative 1: Product & Content • Different products to our competitors and unique in the marketplace: developing a portfolio of exclusive products that no competitor can match or replicate and which is tailored to include additional services and facilities that customers want on their holiday. unique experience.9% to 3. It means the company concerns more about market place understandings and customer’s needs. • Consolidation of the Canadian market through a proposed strategic venture with Sunwing.  Imperative 4: Growth & Capital Allocation • Acquired 11 niche high-growth businesses in Specialist Sectors. Due to the fact. • Increase in return on invested capital to 9. design value creating marketing strategies. while customers also benefit from a more added-value.2%. In matter of Strategic Objectives. we think that TUI have better customer oriented image. • Building our customer relationships: the distribution of products. • Flexible business model that can react to demand changes. is tailored to reflect different customer preferences and market dynamics. • Development of sophisticated capacity and yield management systems.

They both are the market leaders in these markets.4. who held the biggest market shares. Japan.  Before the mergers in 2007.profit and earn customer loyalty. Market position: TUI and Thomas Cook operate in the five five geographic segments UK & Ireland. North America. which includes 27 Source Markets48: Australia Austria Belgium Canada China Czech Republic Denmark Finland France Germany Hungary Italy India Ireland Luxembourg Netherlands Norway New Zeleand Poland Russia Slovenia Spain Sweden Switzerland United Kingdom United States Ukraine Compare with the number of Thomas Cook operating markets is 21 countries 49 Market dynamics:  While the outlook remains challenging there are signs of recovery in consumer confidence. Northern Europe. Continental Europe and Airlines Germany. However. TUI Thomson and First Choice) and Thomas Cook had already been the leading players of UK travel leisure market. and Emerging Markets ( Eastern Europe. the weakness of sterling versus the euro and US dollar is expected to increase input costs and to continue to affect consumer sentiment. TUI is doing business in a larger market. TUI “creates value for customers and shareholders in order to capture value form customers in return” 47. 47 48 49 Page | 64 . 4.China and India).

Strategy Increasing the proportion of differentiated holidays and strengthening web.6% 2008 67. Middle East.4% Mainsteam sector: #1 (34% market Mainsteam sector: #2 share)52 Financial services (Foreign Exchange market): #4 (7% market share) Financial services (Foreign Exchange market): #3 (15% market share) • Target further mainstream margin improvement through product and haul mix.687m Thomas Cook 7.TUI Travel plc Passengers50 5. and India) Controlled distribution51 Market position 2009 78% 2008 75% 2009 68.6m (Including UK. • Develop our e-commerce strategy and move into the online travel agency market.  Engaging in pro-active capacitive management in Travel Mainstream business by adjusting flight and hotel commitments to  50 51 52 Page | 65 .based sales. Ireland.

Key Brands • Continue to grow travelrelated financial services.align supply and demand.  Focusing on flight-yield differentiated hotel portfolio in TUI Hotel and Resorts  Pursuing restrictive cash and working capital management. notably foreign exchange. • Build on our strong performance in key medium haul destinations outside the Eurozone. Page | 66 .

• Continue to grow online distribution channels and improve dynamic packaging capabilities.based sales.3% 2008 37.73m (Including Germany) Controlled 2009 distribution54 46% Strategy  Thomas Cook 2008 40% 7m 2009 38. • Increase sales of exclusive and differentiated product to maintain margin advantage. Key Brands 53 54 Page | 67 .Market dynamic: Following tough trading conditions in the 2009 financial year.  Increasing the proportion of differentiated holidays and strengthening web. • Increase sales to medium haul destinations such as Turkey and North Africa.  Expanding the market share in the German-speaking volume market for cruises.  Focusing on flight-yield differentiated hotel portfolio in TUI Hotel and Resorts  Pursuing restrictive cash and working capital management.7% Expanding the tour operator business in growth markets like Russia and Ukraine. TUI Travel plc Passengers53 9. GDP forecasts for 2010 are ahead of previous expectations helping to improve consumer sentiment.  Engaging in pro-active capacitive management in Travel Mainstream business by adjusting flight and hotel commitments to align supply and demand.

Blue Unique. and on long haul holidays. consolidated market •Limited dependency on third party travel agents •High online penetration •Most local LCCs¹ regional only or loss making Kuoni buying smaller players • Thomas Cook5: 2010 is likely to be challenging as the weakness of the Swedish krona puts significant pressure on margins. the level of differentiated product offered by the Nordics business increased by four percentage points to 41%. during 2009.Market Dynamic: • The UNWTO expects oral customer spending to decline by 4-6%. Page | 68 . This was driven by the opening of a new eco-friendly Blue Village in Rhodes and the creation of a new concept. with 20 small unique hotels in several charter destinations. • TUI: adding capacity recently. • 3 major players.

Tour operator market share: TUI Travel plc Passengers55 5. Turkey and Thailand. •Further expand internet sales.  Focusing on flight-yield differentiated hotel portfolio in TUI Hotel and Resorts  Pursuing restrictive cash and working capital management. • Increase the proportion of customers who book our exclusive.7% 2008 79. inflight sales.4% 2008 79% Increasing the proportion of differentiated holidays and strengthening web.pdf 55 56 Page | 69 .thomascookgroup. Greece. • Consolidate our position in the major Nordic outbound destinations of Spain.com/downloads/pdf/Investor_Day_FI NAL_Website. • Continue to build on the success of our world class. Cyprus.  Engaging in pro-active capacitive management in Travel Mainstream business by adjusting flight and hotel commitments to align supply and demand.based sales. Key Brands Market share: http://www.5m 2009 82. concept hotels.687m Controlled 2009 distribution56 85% Strategy  Thomas Cook 1.

1m 2009 14. Transat.  Engaging in pro-active capacitive management in Travel Mainstream business by adjusting flight and hotel commitments to align supply and demand. • Strengthen controlled distribution. Europe.  • Pursue flight and accommodation cost savings and strengthen hotel exclusivities. consolidation is possible with the proposed Sunwing merger with TUI.1% 2008 15. • Destinations: Caribbean Winter focus Mex/ Carib. especially online.54m (Including Mainstream and Specialists and Activity sectors) 2009 2008 Strategy Increasing the proportion of differentiated holidays and strengthening web.7% Controlled distribution 58 0. 57 58 Page | 70 .  Focusing on flight-yield differentiated hotel portfolio in TUI Hotel and Resorts  Pursuing restrictive cash and working capital management.Market dynamics • Thomas Cook: The outlook is more positive in the independent segment and. Sunwing/ TUI • Transat and Sunwing/TUI mainstream focused USA. Mexico. • Grow independent travel through dynamic packaging technology and improved product line. while there is still over capacity in the mainstream travel market. • Grow newly launched Financial Services division and expand product range.based sales. summer focus Europe • Overcapacity in mainstream and no entry barriers • Highly fragmented retail distribution • Independent larger more stable market • Three major players in the overall leisure market Thomas Cook. TUI Travel plc Passengers 57 Thomas Cook 1.

  Page | 71 . Market dynamic Market conditions have not changed significantly in the German airlines market. Thomas Cook is a leading player in North America leisure travel market.Key Brands Canada Leisure Market: With more than 1.54 m passengers of TUI ) passengers and hold up to 17% of Canadian Independent wholesale and Mainstream Market share (TUI : 3%).  German tour operator market less integrated than UK Stimulation of demand for travel products.  Highly competitive market.1 million (compare with 0.

Market position before the merges: Page | 72 . Demand for flexibility & price transparency but growth is levelling out following consolidation.

Market position after the merges: TUI Travel plc Passengers 59 Thomas Cook 5. 2008 2009 Strategy Increasing the proportion of differentiated holidays and strengthening web.  Focusing on flight-yield differentiated hotel portfolio in TUI Hotel and Resorts  Pursuing restrictive cash and working capital management. • Drive synergies and other benefits through greater co-ordination of activities with other Thomas Cook Group airlines.775 million (Including Mainstream and Specialists and Activity sectors) 48     Own shop: 428 Franchise: 974 Strong focus on mainstream Highest brand equity in the Market Controlled distribution 60 2009 46%  2008 40% Ownshop: 166 Franchise: 395 Strong focus on mainstream market Well positioned with Neckermann brand in lower/ budget segment. especially fuel related efficiencies.  Expanding the market share in the German-speaking volume market for cruises.  Engaging in pro-active capacitive management in Travel Mainstream business by adjusting flight and hotel commitments to align supply and demand. Key Brands 59 60 Page | 73 .9m 34     Number of aircraft Retail Estate Product Focus 8. • Enhance benefits from cooperation with other external airlines. • Focus on cost-saving.based sales.

TUI performs better than Thomas Cook based on the fact that TUI not only focuses on airline. 61 62 Page | 74 . TUI travel plc achieve the biggest share holder in UK market.144 (2009) which has an increase 3% over the prior year. Northern Europe. which led to a two percentage point improvement in load factors for its summer 2009 programme and resulted in a £10m improvement in margins over the prior year. TUI and Thomas Cook are the direct competitors of each other. North America). having many similarities in marketing strategy. TUI is successful at maintaining the market leading player. but also is the market leader in leisure travel market with 8.775 million customers (2009) 61 and achieves revenue of £ 4.Market Share: In Germany. TUIfly also improved its result by cutting capacity in its loss-making scheduled flying routes. TUI also announced that they entered into a strategic venture with Air Berlin. Germany Core Market Share 29% 40% TUI Thomas Cook Rewe 17% 6% 16% Alltour Others In 2007. Capacity was cut by 16% in summer 2009. 62 Operating in the same markets. we see that TUI has higher market positions in the core market (UK & Ireland. which will further de-risk the TUIfly business through an exit of the scheduled flying operation and will secure optimal capacity for the German tour operator. Capturing the advantages from the merges with Fist Choice. Number of 48 air craft was too big As a consequence TUIfly was sub scale to operate a mixed model effectively and too big to optimise tour operator margin. Continental Europe and Airlines Germany. TUI fly faced problem because of the heavy assets. Across the core markets in Europe. From our group prospective. During the year.

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5.1. 4. TUI travel plc TUI has four main business sectors: Mainstream Sector 64. 63 64 See Appendix 1 See Appendix 1 Page | 76 . Product and Service: Both focus on leisure travel63 Thomas Cook and TUI travel plc have many commons in products and services. Activity Sector and Accommodation & Destinations Sector.4. However.5. it is not mean that the ways they segment their product and service are the same. Specialist and Emerging Markers Sector.

transfers and excursions either as separate components or together as part of customer assembled holidays Specialist & Emerging Markets Sector 65 Appendix 1 Page | 77 .500 retail shops. It comprises leading tour operators and ‘power’ brands and operates a fleet of 146 aircraft and circa 3. financial performance and employee numbers. car hire. Mainstream sector includes various package holidays65: It operates within two key segments of the leisure travel market:  Mainstream holidays .which includes the sale of flights.which include the sale of differentiated and exclusively available products. Northern Region.Mainstream Sector Mainstream is the largest Sector in terms of size (65%). accommodation. Central Europe and Western Europe. long haul travel as well as more traditional package holidays:  Sun holiday  Winter holiday  Family holiday  Adult holiday  All inclusive holiday  Luxury holiday  Component . It has three divisions.

The sector consists of 40 businesses operating from North America. Africa or Australia. Turchese and Hayes & Jarvis. Europe and. Page | 78 . Top selling brands include Mostravel. Specialist travel experiences include around-the-world private jet expeditions. emerging markets such as Russia and Ukraine. most recently. student educational tours and tailormade trips to the Far East.The Specialist & Emerging Markets Sector is an international portfolio of travel businesses focusing on specific destinations. premium travel experiences or particular customer demographic segments often with differentiated and exclusive product.

The Sport businesses are leaders in supporter-led cricket and rugby tours in Australia and the UK. Ski. Moorings and Le Boat. Adventure. Top selling brands include Crystal Ski. Accommodation & Destinations Sector The Accommodation & Destinations Sector sells and provides a range of services in destination to tour operators. to trek holidays for groups of young adults in the Himalayas. The Adventure businesses take more customers to iconic adventure destinations than any other operator. Page | 79 . Each of these divisions has market-leading positions.Activity sector This Sector has over 40 activity travel businesses that operate under five divisions Marine. corporate clients. This Sector also includes the leading yacht brands in Europe and the US and the world’s largest ski operator. and direct to the consumer worldwide. while the Student businesses encompass everything from the traditional school trip to France. Student and Sport. travel agents.

Independent 66.com.Business to Business (B2B) and Business to Consumer (B2C). organising meetings. 66 67 See Appendix 3 See Appendix 3 Page | 80 .2. TUI Hellas). Hotelbeds. conferences and events (MICE). round trips. cruise handling as well as integrated website solutions for our customers. Travel related to Financial Services67 sector.com and LateRooms. incentives. and Emerging Markets.5. transfers.Services include hotel accommodation. A&D is structured along key business lines . Thomas Cook Thomas Cook operates business in four sectors: Mainstream. 4. Top selling brands are TUI (used by a number of incoming agencies including TUI España. excursions.

Page | 81 . Independent travel With Independent travel products.make : Flights Flights + Hotel Cruises City Break Extra services (car hire. booking lounges and parking) Hotels    4. Independent travel products include:  Tailor. cheap calls abroad.Mainstream In mainstream sector. Thomas Cook provides their customers a wide range of choices for package holidays:      Beach Holiday Clubbing Holiday Faraway Holiday Snow Holiday All inclusive holidays.3. smart box. travellers have changes to build their travel plans themselves from multiple components which Thomas Cook offers.5. Financial Services related travel of TUI travel plc and Thomas Cook: Both Thomas Cook and TUI have many offer their customers many convenient financial Services related travel.

Special packages: ELVIA years 365-Full Protection Package ELVIA year-cancellationFull Protection Plus ELVIA years .Family Travel Insurance . Products  .Couple .cancellationFull protection ELVIA annual travel medical protection ELVIA Full Protection Package ELVIA cancellation-Full Protection Plus ELVIA cancellation-Full protection Page | 82 .Single Parent Family .Individual .Individual and Family Travel Insurance Winter Sport Cover (Optional) Excess Waiver(Optional) .Travel Insurance TUI Travel plc Thomas Cook Overview Thomas cook and TUI both teamed up with Mondial Assistance to offer clients flexible travel insurance options.L'TUR travel insurance package Travel Cancellation insurance Travel Interruption insurance Travel health insurance RundumSorglos Service Baggage Insurance Curtailment Protection .

Other Products Travel voucher Moblie banking In the matter of financial services related to travel. However.  0% commission on holiday money with no cash handling fee at Thomas Cook and Going Places.Online card application . . Thomas Cook shows more concern about that area Page | 83 Buy currency and travellers' cheques online or in store . . Thomas Cook and TUI have many similarities in services. Currency Card.Benifits:  Much easier to manage available balance  Linked to travel insurance services  Bonus for travellers Apply through phone and mail Thomas Cook offers their customers Credit card services such as Thomas Cook Credit Card in UK (visa) and in Germany Neckermann Reisen MasterCard.  Special offers for card holders.  0% interest on balance transfers for 9 months made within 60 days of account opening (2. .  0% interest for the first 3 months from account opening on all card purchases.Benifits:  Earn Travel Pounds everywhere you shop and save money at Thomas Cook and Going Places.TUI focus on debit card product such as TUI card in Germany(Visa) and TUI UK's Travel Money Cards . available in Euro or US Dollar currencies.The Travel Money Card programme is managed by Prepay Solutions and issued by MasterCard.99% fee applies). Foreigner currencies services and Travel Cheque Buy currency and travellers' cheques online or in store Transfer money online or in store.The cards are known as Thomson and First Choice Travel Money Cards and each have their own branding.Travel Card . .Available in many currencies. ensuring global acceptance.

Mobile baking. travelers don't need to pass a credit check to get one. Thomas Cook offers their clients more choices for financial services financial with the unique products such as Currency Card. It has 2 dimensions: market share and market growth.net/ Page | 84 . Stars (=high growth. nor is it linked to their bank account. a company should have a portfolio of products that contains both high-growth products in need of cash inputs and low-growth products that generate a lot of cash. However.com/scl-powers-tuis-new-travel-money-cards valuebasedmanagement. and of course.scluk. Cash Cows (=low growth. The basic idea behind it is that the bigger the market share a product has or the faster the product's market grows the better it is for the company." 68 4.Use large amounts of cash and are leaders in the business so they should also generate large amounts of cash. Travel voucher. Retrieved 2010.and unlike a credit card. Prepaid cards make it much easier to manage their available balance whilst away.valuebasedmanagement. "More and more consumers are choosing to put their holiday money onto a prepaid card over more traditional options such as travellers cheques or foreign bank notes. To ensure long-term value creation. Different with Thomas Cook. The Boston Consulting Group box (BCG matrix)69 The BCG matrix method is based on the product life cycle theory that can be used to determine what priorities should be given in the product portfolio of a business unit. because the rewards will be a cash cow if market share is kept. Placing products in the BCG matrix results in 4 categories in a portfolio of a company: 1. if needed any attempt should be made to hold share. TUI concentrates on develop their debit card product. high market share) 68 69 http://www.travelers can only spend up to the value of funds that they load onto your Travel Money Card .Frequently roughly in balance on net cash flow. from http://www. the cost of use of the Travel Money Card when compared to most credit/debit cards is significantly lower. high market share) . . 2. which is considered as new using trend.6. Prepaid travel money cards make budgeting easier .than TUI.

Profits and cash generation should be high. incentives.Deliver cash. .If nothing is done to change the market share.Foundation of a company 3. and because of the low growth. low market share) . .Either invests heavily or sells off or invests nothing and generates whatever cash it can. Increase market share or deliver cash. TUI Travel plc Star       Activity Sector Specialist & Emerging Extra services (renting car) Package holiday Independent holiday (city breaks).Avoid and minimize the number of dogs in a company. Based on the products of TUI and Thomas Cook mentioned above. we can fill them in 4 categories of BCG matrix. as the growth stops. question marks will simply absorb great amounts of cash and later.7. conferences and events (MICE)) Hotels. Travel insurances) Accommodation and Destination (organising meetings. Extra (car hire).Have the worst cash characteristics of all.Beware of expensive ‘turn around plans’. because high demands and low returns due to low market share . . Question Marks (= high growth. . low market share) . otherwise liquidate 4. investments needed should be low. Dogs (=low growth. Keep profits high. Cruisers        Thomas Cook Component holiday. a dog. Accommodation Package holidays Specialist Financial services related to travel Cash Cows  Question Marks Dogs       Hotels Airlines Cruisers 4. Financial services (foreign currencies services and Money card. resorts Airlines.. Activity Sector. Supply chain: Page | 85 .

Transportation Services. Retails and agents play the role as the bridges between the travel company and the customers. Thomas Cook Group_nov strategy presentation . and Ancillaries from suppliers or from their own company.pdf Though TUI and Thomas Cook share the same basic supply chain. will provide the company the market and client’s information and demands.final. and then they delivery products and services for customers.TUI and Thomas Cook have the same basic supply chain.web version . there are still some differences: Page | 86 . They both use the product source such as Hotels.

TUI Travel PLC TUI is address as direct supplier in travel industry. As we mentioned earlier in chapter 4 (Management and Organisation), TUI travel plc is a part of TUI AG, which also includes TUI hotel and Resorts and TUI Cruise. This fact gives TUI the advantages to offer their customers hotels and services with high levels of quality and standards. Beside have their own airlines, TUI also have a stronger cooperation with the biggest European airlines, for example Garman companies, KLM and Turkish Airline. The payment of products and services are in Euro. With the offices are mainly located in Germany, so their main target markets are Europe, especially Germany. Thomas Cook Thomas Cook is more like Travel intermediaries, so they has wider range of hotel offers for their customers from luxury to cheaper price hotels. Like TUI, beside have their own airlines, Thomas Cook also cooperates with some big airlines such as British Airway, KLM. The payments are in Pound. Thomas Cook has a better reputation in UK. They targets mainly on customers are UK.

http://www.thomascookgroup.com/downloads/pdf/Investor_Day_FINAL_Website.pdf

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4.8. Price

As a Travel intermediary, Thomas Cook offers the cheaper prices for the same services than TUI. Cooperating with other hotels and airline companies, Thomas Cook forces on low cost travel market with flexible choice for customers. In contract, TUI as a direct supplier, targets on high level services standards, which will be definitely more expensive. In order to compare the services prices between Thomas Cook and TUI, our group have carried out a small research. We went to website of TUI and Thomas Cook, book a same holiday (2 persons) for the same time: Destination: Turkey Type: All Inclusive Hotel: Titanic Beach Rst (4 stars) As we can see, with a same package holiday, Thomas Cook´s price is £ 1904.78, about £140 cheaper than the price that TUI (£2046 offers). This fact also reflects their aims to reduce the service costs, especially accommodation cost in Thomas Cook pricing

http://www.thomascookgroup.com/downloads/pdf/Investor_Day_FINAL_Website.pdf

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strategy. TUI has a higher service´s price, but also they offer more value for customers such as more baggage allowance (20kg per person) than Thomas Cook (15 kg per person).

4.9. Promotion

Thomas Cook and TUI travel are both such the big travel companies, who own hundreds of brand names. Brands are more than names and symbols; they represent consumer´s perceptions and feelings about the products, services and its performance. This requires the specific promotion strategies for each of their brand name. In common, their promotion methods are quite similar with the basic ways: • Travel Brochures • Agencies including through posters, flyers • Advertisements including in newspapers, magazines, trade publications for the travel industry • Direct mailings to current customers • E-mails • Banners and links on the Internet • Flyers • Radio and Television commercials • Joint Promotions and Sponsorship

• Scholarships

The TUI.com Reisemagazin (TUI Travel Thomas Cook Travel Magazine magazine) Thomas Cook Travel Magazine has a Magazine has been implementing the quarterly readership of over two million. TUI.com Reisemagazin since November The magazine is distributed on all Thomas 2008. The goal is the production of a Cook Group flights including Airtours, Club regular, multimedia magazine that speaks 18-30, Direct Holidays and Signature. The to the reader's emotions using all of their editorial content is topical, travel-related senses. This is something that is usually and aimed at holiday goers. It incorporates not possible for conventional travel destination specific content alongside
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and one it can play a significant part in tackling. The readers are affluent holidaymakers. online page turning travel magazine surprises the reader with travel videos. Thomas Cook UK & Ireland has been particularly active in this area and is spearheading this work through their partnership with the Travel Foundation. The Travel Foundation Protecting children: The sexual exploitation of children in tourism includes the production of child pornography and the buying and selling of children for prostitution. The travel industry also contributes to climate change. Many tourist Page | 90 .Supporting destination communities . large multimedia picture galleries. protecting wildlife and preserving destinations for the future enjoyment of others. buying local and paying fair. thus increasing carbon-related costs for business and consumers. Working with hotels. the principal gas responsible for climate change). At the same time. And increased volatility in fuel prices represents a threat to our airlines. discovers new places and holiday trends and can access travel offers with the click of a mouse and book his holiday directly online. honouring local cultures. this is to help decreasing CO2 flying.Animal welfare Aviation and climate change: They are hunting for travel industry climate changing.catalogues. with core ages between 25 and 54. such as: Sponsoring education in Turkey. Some customers have started to avoid flying so as to reduce their carbon footprint. governments are regulating to reduce emissions through taxes and carbon trading schemes. The monthly.Protecting children . The reader goes on digital trips. While aviation currently accounts for less than 3% of the world’s carbon dioxide emissions (or CO2. and are evenly split between male and female. Thomas Cook lifestyle features. inciting sounds and spectacular flash effects. Thomas Cook promotion focus on: .Aviation and climate change .Quality . The magazine also features the duty free products and menu available onboard. Supporting destination communities: Sustainable tourism is about holidaying with respect for local communities: preserving natural resources. This is clearly a pressing issue requiring sustained and substantial action from the travel industry.Partnering with suppliers . travel is a rapidly-growing industry and improvements in fuel efficiency will be insufficient to offset this rise.

Partnering with suppliers: Travelife supports hoteliers to implement sustainability measures and to help customers reduce their impacts. we can encourage the hotels to win Travelife awards. the sex offenders move to the next. resulting in a separation that is disastrous for the baby  Large numbers of tourists getting too close can disrupt hunting and feeding patterns for wild animals. by responding to a complaint promptly.destinations do not have the infrastructure to protect these children or offer them a way out. And when the law is enforced in one destination. Quality: A key part of quality management is being open to complaints and seeing how valuable they are to the company. By training our employees as Travelife auditors. including being made to perform in ways not natural to them or being used as photographic props  when whale watching. What is more. we can transform a customer’s dissatisfaction into a view of Thomas Cook Group as a company that cares. A complaint is someone telling us how we can make our customers happier. This creates an incentive for more hotels to adopt sustainable business practices. And by including the award logos in our brochures. It is therefore vital that the tourism industry gets involved and works to drive out the exploiters who use hotels. tourist boats can get between a mother and her young. and some can become very ill if exposed to human conditions like colds or diarrhoea. bars and other tourist facilities to do their trade. Animal welfare: Examples of how these freedoms can be denied to animals as a result of tourist activity include:  inappropriate use of animals. we enable customers to make informed decisions and drive business to the more sustainable hotels. Page | 91 . and that is indispensable business intelligence.

Germany’s leading tourism group. whether on grass. The projects receiving support range from life-help groups and all-day schools and lunch clubs for disadvantaged children. Eagles Charity Golf Club. TUI Sponsorship: Since 1995. provides us with a bit of a break in our everyday lives. supporting in education and training for children and young people  TUI Sponsorship  ECPAT Futouris: Futouris is a non-profit association operating under the aegis of DRV. the German Travel Association. protect the environment and natural resources and preserve biodiversity in our destinations. Page | 92 . employees at TUI in Hanover have been annually supporting a charitable welfare project. protecting the environment and nature  Sport sponsoring  TUI Foundation. Sport sponsoring: Sport.TUI Travel plc As a part of TUI AG. the Hannover travel group has not only been a partner of many professional teams but has also been supporting several sporting events in Germany and abroad. the international marathon on the Spanish island of Majorca. However.000 euro has been collected for direct help on the ground. It supports projects to improve living conditions. TUI Foundation: The TUI Foundation supports projects with financial or material resources allocated within the framework of an application-based system. On an annual basis one charitable project is chosen and supported. promote education. At the end of the year. TUI travel plc develop promotion strategy based on social responsibility:  Futouris. To date a sum of around 410. has found its mission here to put a smile on people’s faces. Hannover Scorpions. As a service-oriented and international group. it also undertakes its own projects. For several years now. Marathon Hanover. promoting education. through to help for children with cancer and their families. management then presents the amount collected as a cheque to the institutions. ice or track. Such as: Hannover 96. at the same time we try to promote initiatives established with a basic principle compatible with our own everyday operations. TUI.

TUI have their own songs. Focus on cheap price holidays. flights and hotels.ECPAT: Throughout the Group the TUI corporate companies are united in fighting against child prostitution. In the majority of cases this is carried out in cooperation with the international child protection organization ECPAT. to emphasise more on the message of customer oriented company. Follow the new promotion trends. Thomas Cook have other special way to promote their services with a smaller marketing budget. TUI and Thomas Cook aim to sustainable marketing strive for the long run survival of customers and the business that provide for them. Highlight promotion: TUI has a bigger budget for marketing. especially with British airways. The Budget allows them to develop many media campaigns. Page | 93 . Delivery friendly environment messages. they offer special promotion flight program for journalists. For instance. both Thomas Cook and TUI are changing their strategy to have the better image about green travel companies. which build an impressive image in the customer´s mind. such as the song “Let´s make people smile” or “Touch the sky”. protecting children and animal welfare. Beside design company logo as a smile. The two companies concern on activities which are high concerned topics such as climate changing.

Distribution 4.1.10.4.10. Booking Routes TUI and Thomas Cook have the same basic distribution channel with same basic Booking Routes Advantages and Disadvantages of the Booking Routes: Page | 94 .

10.party distributions Ecommerce Thomas Cook Own Travel agencies Franchises Third. Most consumers notice the variety of information and distribution channels while switching between them. Based on this number of perceived channels the customer measures the size of the company which is an important issue. Basically. and invite the customer’s curiosity by offer the links go to the website.businessdictionary.co. For example.com/definition/cross-channel-marketing. The various channels are dedicated to different customer segments in order to reach the full market potential.de/ http://www. and Service Hotline.tuifly. Cross Channel Marketing TUI and Thomas Cook both use same distribution channels: E-Mail.party distributions All most every brands have the brand Thomascook.com: Each country website for customers to book has one website for online services online booking. Direct Booking.fr/ http://www.2. For the 70 http://www. Distribution channels TUI Travel Agencies Own retail shops Franchises Third.thomascook. That also means that customers often use various channels for information procurement and product/ services purchasing.aspx http://www.com/de/ http://www. As we can see on the booking chart.uk/ http://www.neckermannreisen.nl/wintersport.firstchoice. In some cases an individual channel can compensate drawbacks of other channels.php?title=Multi-Channel_Marketi Page | 95 . Thomas Cook and TUI use “cross channel marketing”. the lack of face-to-face communication experienced in online tourism channels can be compensated by calling the customers attention on available service hotlines for supporting him on specific questions. http://www.uni-muenster. (Re-) Auctions.uk/ http://www.pl/ http://www.co.html https://ie-wiki.arke. or the numbers to call for the further information.thomascook. which means use of one marketing channel (such as direct mail or internet) to support or promote another channel (such as retailing)70 .10.com/ http://www.de/index.thomascook.thomson.de/ Telephone Selling Call Centers Call Centers 4.4.3. customers are given some sensations about travel services.thomascook.

Both Thomas Cook and TUI Thomas Cook are now moving into the online channel in a serious way. Apply Cross Channel Marketing. Internet has an increasing impact to human life. TUI have wider distribution channel than Thomas Cook (3400 owned and franchised travel stores). 4. the UK & Ireland and approximately 30 million customers per year. in order to maximize their market power. The „TUI Reisemagazin‟ provides interested parties with multimedia information on selected holiday offers in form of an attractive online magazine.500 retail shops in continental Europe. the website of TUI additionally offers a complete online version of their print catalogue which can be browsed for offers by thumbing through the pages .com or the telephone numbers to contact their call center. seasons and the separate operators of the TUI group. With approximately 3. that again increases the trust level of a customer towards the company. Page | 96 . Ecommerce Nowadays. The website furthermore integrates a regular newsletter subscription in order to inform potential customers about news and special offers.magazine also provide customers links to thomascook. Thomas Cook flyers and e.The online catalogues like the printed versions are assorted by holiday destinations.11. It contains photo galleries and videos and links to the relevant partners.market leaders like Thomas Cook and TUI. The front page directly links subsidiary companies of the TUI group like TUI Cruises and TUIfly. Ecommerce become a new business trend.

retail travel agency to offer customers a way to request flight availability and buy vacations.fr for France. www. thomascook.K.com”. travelers checks. Thomas Cook has series of booking website “thomascook. It is really easy for customers to search for information about the holidays. Page | 97 . such as thomascook.com was launched. Since then. they can just go to Thomas Cook website with different domains. So it will be easy for customers when they want to book a product or service of Thomas Cook in different countries. Both Thomas Cook and TUI booking websites is user friendly. thomascook. Both companies‟ websites are designed to allow clients approach easily with wide range of travel options. Thomas Cook was faster in UK online market when in1997. making it the first U.de for Germany.thomascook. book and do payment online.TUI is successful at building a unified customer database that helps it compete effectively with established rivals like Thomson and First Choice. while TUI has different websites for different brand names. foreign currency and travel guides over the Internet.com has become a business in its own right.

web version . Offering the cheaper prices and effective promotion strategies. Thomas Cook develop the unique promotion offers. in our group´s opinion. The advantages from the bigger scale and heavier assets allow TUI has more budgets for marketing. TUI is performing better than Thomas Cook.final. Thomas Cook still have to stand behind TUI website about number of weekly visits in UK. and they are the leading player in almost of the core markets.12.We can see both TUI and Thomas develop ecommerce activities by the same strategies: • Use strong brands to attract customers online and offline • Build on our already leading travel site • Use travel expertise • Develop a multi-channel customer proposition • Use customer insights to optimise offering and pricing • Increase sales of ancillaries • Invest significantly in systems Through being the first U. Thomas Cook also has their own marketing strategies to compete. However.pdf 4.online retail travel agency. TUI operates in more market sources. Conlusion for Marketing chapter In the matter of marketing. which is really helpful in building a stronger image with customers. Marketing with the smaller budget. maintaining too many brand at same time is higher the expenses for marketing of TUI. As direct competitor with TUI in every core market.K. and keep the services in the high prices. This will definitely lower the company’s net profit. Thomas Cook is strengthening their market position. Chapter 5 Management and Organization: Page | 98 . focus on special groups of customers. Thomas Cook Group_nov strategy presentation .

1. In addition.1 billion with total earnings of €656.1. Company Profile 5. incoming agencies).1 On 30 September 2009 the headcount totalled 65. airlines. Company Background TUI Travel PLC TUI Travel PLC is a part of TUI AG. In the short financial year 2009 the turnover of TUI AG was €13.6 million (underlying EBITA). the group holds a 43. which is Europe‟s leading travel group comprising a controlling stake in TUI Travel (tour operating. Page | 99 .5. online and high street distribution.33 per cent stake in the container shipping line Hapag-Lloyd.1. TUI Hotels & Resorts and the cruise ship business.000 employees.

thanks to the inspiration and dedication of a single man. Thomas Cook Group plc is one of the world's leading leisure travel groups with sales of around £9 billion (€12 billion). Thomas Cook.033 people worldwide. with the leading British travel company MyTravel.TUI Travel PLC is a FTSE 100 international leisure travel group listed on the London Stock Exchange. 22.000 employees. In February 12. with around 157aircraft and circa 3500 retail outlets in Europe and employs 60.The leading German retailer KarstadtQuelle AG is to merge its Tourism subsidiary. operating in over 180 countries and serving 30 million customers in 27 key source markets.3 million customers. Activity and Online Destination Services. Specialist and Emerging Markets. Thomas Cook Group PLC Thomas Cook is the world‟s best-known name in travel. The newly established company will be named Thomas Cook Group plc and will be traded on the London Stock Exchange. West Sussex. 2007. It is headquartered in Crawley. From these humble beginnings Thomas Cook launched a whole new kind of company devoted to helping Britons see the world.400 owned and franchised travel stores and interests in 86 Page | 100 . England. It is a constituent of the FTSE 100 Index. a fleet of 93 aircraft and a network of over 3. The company mainly serves the leisure travel customer and is organized and managed through four business sectors: Mainstream. with a successful one-day rail excursion at a shilling a head from Leicester to Loughborough on 5 July. It was formed on 3 September 2007 by the merger of First Choice Holidays PLC and the Tourism Division of TUI AG. 31. Thomas Cook began his international travel company in 1841. which owns 43% of the company. KarstadtQuelle will hold 52 percent in the new company and will consolidate it fully.

Conversely. markets and competitive advantages. North America Continental Europe and Airlines Germany. •To be the best travel company in the world to travel with. We have a stated strategy which is to create superior shareholder 71 Page | 101 . • To perfect the personal leisure experience.1. In matter of Mission Statement. Hungary. TUI travel plc does not publish any mission statement. Thomas Cook • Further we go to make dreams come true states itself with four different missions based on five main divisions: UK & Ireland.1. and state its business goals and philosophies. guides the strategies and structure of company UK & Ireland marketing orientation. Being confident about the reputations as one of the market leaders in Tourism industry.000 * 73 of the countries Thomas Cook operates are under the daughter company Condor and in the rest of the 20 companies Thomas Cook plc operates by itself. Finland). the Netherlands. and German airlines operating under the Condor brand. Denmark. the Leader of TUI believed it is not essential to have a sentence to describe company's function.033 180 157 30.hotels and resort properties. in management prospective. Belgium. A mission statement. Under the global vision “WE GO FURTHER Northern Europe TO MAKE DREAMS COME”. They have heavier assets with180 air craft (Thomas Cook 95) also have larger distribution channel. Company Scale Employees Operating countries Aircrafts Customers TUI Travel plc 60.000 Thomas Cook 31. The differences in the Thomas Cook ´s Mission Statements in different divisions are related on its flexible business models and concentrated marketing strategy for every different geography market. Continental Europe (Germany.300. North America (Canada and USA). Poland. Mission Statement “A Mission Statement of the organization’s purpose – what it wants to accomplish in the larger environment” 71. TUI has a bigger scale and operates business in wider market. France. Northern Europe (Sweden. Austria.000 93* 95 22. Slovenia and Slovakia). North America.000. Norway. which have already become the famous concepts. It operates under five segments: UK & Ireland. 5. and invest in Northern Europe. “TUI Travel PLC does not have a Mission Statement.2.3. TUI Travel PLC and •Exceptional Service From Exceptional People Thomas Cook Group PLC have different Continental Europe and Airlines Germany perspectives. work for. 5.

As customer oriented companies.tuitravelplc. As already mentioned in the table above. because the more customers they have the better for the company. customers are very important for both companies.value by being the world’s leading leisure travel group providing customers with a wide choice of differentiated and flexible travel experiences to meet their changing needs To enable us to achieve this goal we have identified four key strategic imperatives which are linked to our KPIs. TUI Travel plc. Retrieved from http://www. 5.3. These behaviours allow them to truly engage in their work and optimize their performance – as individuals and as a business. In long-term both companies want to grow and be the biggest travel agency in the world.com/tui/pages/investors/shareholderinfo/faqs Page | 102 . the vision of Thomas Cook is that „they go further to make dreams come true‟. 72 FAQS. which is quite similar. Their vision is Making Travel Experiences Special and their four values are: • Responsible leadership • Customer obsessed • Value driven • Playing to win Winning behaviours have been developed to help embed these values in every day working life in a number of ways. Vision and Values: TUI Travel plc Their common vision and values unite their across the Group and they call this their TUI Spirit.”72 TUI Travel and Thomas cook plc have the vision.4. Thomas Cook tries to do something extra for the customers. Thomas Cook These values are the focus for ensuring that every Thomas Cook employee embraces what they stand for and are PROUD to work with us delivering customer service that‟s second to none. TUI and Thomas Cook wants to make sure that their customers come back every time when they think of travelling.

Page | 103 . because the environment is a big issue for us and the next generation. the vision of Thomas Cook is that „they go further to make dreams come true‟. TUI and Thomas Cook wants to make sure that their customers come back every time when they think of travelling. customers are very important for both companies.TUI Travel and Thomas cook plc have the vision. Thomas Cook tries to do something extra for the customers. As already mentioned in the table above. Companies like TUI and Thomas Cook have to take in account the environment. In long-term both companies want to grow and be the biggest travel agency in the world. Sustainability Development and Social Responsibility Sustainability development becomes more important for companies specially for transport companies. which is quite similar. because the more customers they have the better for the company. 5. We can say that TUI Travel and Thomas Cook are also transport companies because the offer their customers a service with aircraft.3. As customer oriented companies.5. Nowadays more people want to travel environmentally conscious.

but they are also aware of the potential impact on the environment. The Group Code of Conduct covers a wide range of sustainability issues. they have been included in the Carbon Disclosure Leadership Index. They recognize the many virtues of travel. now and in the future. At the end of 2008/2009. including human rights. societies and local cultures. in the 2008 Good Companies Guide – The Observer‟s annual ethical ranking of FTSE350 companies. They encourage all TUI Travel businesses to develop their own sustainable development strategy.TUI Travel Throughout the year. They aspire to lead in sustainable development within the leisure travel industry. • For the second consecutive year. articulating their vision and approach to sustainable development. they believe this goal will help build shareholder value for TUI Travel and contribute to operating a strong business now and in the future. Sustainable development strategy of TUI Travel Plc During 2008/2009. It has been developed in consultation with internal and external stakeholders. At Thomas Cook Group. • TUI Travel‟s first full Sustainable Development Report was published in July 2009. with responsibility for managing such risks also shared by the businesses themselves. sustainable development has continued to be an important part of the business agenda for TUI Travel. fluctuating exchange rates and the outbreak of swine flu. In the long term. aligning with Group priorities. intensified by many other factors including consumer confidence. • TUI Travel is listed on the FTSE4Good Index in recognition of its transparency and for meeting strict social. environmental and governance standards. Policy and mitigation for Groupwide risks relating to sustainability are facilitated by the Group Risk Management and Sustainable Development Departments. at 16. 73% of TUI Travel businesses had their own sustainable development strategy. Thomas Cook plc The last year has proved a testing time for all areas of business. business ethics and transparency and commits TUI Travel to upholding the principles of the UN Global Compact. not least the travel industry. their response to challenging market conditions is to work harder and go further to make dreams come true for their customers. which highlights the top 10% of FTSE350 companies that have displayed the most professional approach to climate change disclosure. The travel and tourism industry has a responsibility to operate in a sustainable way and Thomas Cook. the positive cultural exchange and the boost to local economies. with independent verification of their targets by Bureau Veritas. • It is the highest placed travel company. The global economic downturn brought with it a decline in international tourism in 2009. Page | 104 . they developed a Group sustainable development policy in conjunction with key colleagues. terrorism incidents. TUI Travel‟s sustainable development strategy is based on consideration of the key issues affecting the Company.

their importance represents a genuine business risk. Thomas Cook. Today. His company was inspired by a strong sense of social justice and moral responsibility: what today they call corporate social responsibility (CSR). They aim to have sustainability at the core of their business and feature it as an integral part of their strategy. Over 160 years ago a former preacher. particularly when it comes to the environment. but to all the people whose lives they touch. Thomas Cook didn‟t just want people to have fun. we can say that both of the companies are trying to work on a very sustainable way.which founded its business with clear social and educational intentions. investors. they‟re still inspired by their founder‟s values. unwind – and broaden their horizons. devised the first package holiday. And that includes managing their activities in a morally and socially responsible manner. They believe they make a world of difference – not only to their customers. He believed affordable travel could change working people‟s lives for the better. Society. Since then. However. These responsibilities no longer sit on the periphery. the business he founded has helped millions of people to relax. but demand that both time and money be invested in the preservation and protection of the incredible people and places they come into contact with. governments and communities no longer look for. customers. We compare the two companies by these two points. is proactive in this area. Page | 105 . Their mission is to perfect the personal leisure experience. TUI Travel is working more on sustainability and Thomas Cook concerns more about the responsibility for the people in the area‟s they are cooperating.

which means: “the basic on which job are grouped together73” TUI Travel plc Organizational structures TUI is using Geographical Departmentalization.). Horst Baier 2. Central Europe Chief Financial Officer Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Chairman Non-Executive Director Non-Executive Deputy Chairman Chief Executive and Senior Robbins. Organizational structures Both operating in travel industry. Management. S. S.). & Coutler. M. Clare Chapman 6. Peter Long 73 74 Title Non-Executive Director Managing Director. however. Tony Campbell 5. Inc. which means groups jobs according to Geographical Region.1. Sir Michael Hodgkinson Independent Director 11. (tenth ed. Paul Bowtell 4. Bill Dalton 7. P. Dr Michael Frenzel 9. & Coutler. Page | 106 . Adv antages and disadvantages of Geographical Departmentalization74   Advantages More effective and efficient handling of specific regional issues that arise Serve needs of unique geography market better   Disadvantages Duplication of functions Can feel isolated from organization areas other Broad of Directors: The Company is controlled through its Board of Directors –the Directors at the date of this report are: Director’s name 1. (2009). Dr Volker Böttcher 3.5.2. Company Organization 5.2. M. New Jersey: Pearson Education. New Jersey: Pearson Education.. Jeremy Hicks 10. Inc. (2009). TUI and Thomas Cook are using different form of departmentalization.. Robbins. P. (tenth ed. Management. Rainer Feuerhake 8.

Northern Region Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Commercial Director TUI Travel plc Organizational structures chart: Page | 107 . Dr Albert Schunk 15.12. Giles Thorley 17. Dr Erhard Schipporeit 14. Harold Sher 16. Johan Lundgren 13. William Waggott Managing Director.

& Coutler. S. which oversees the strategic development and operational management of the Group's businesses. Michael Beckett. 75 Robbins. knowledge. which is combined by Geographical Departmentalization and Functional Departmentalization (Groups Jobs according to function). The Group Chief Financial Officer and the Chief Executive Officer. and orientations. the Board currently includes three Executive Directors and five Non-Executive Directors. (2009). Page | 108 . The Group Chief Executive Officer chairs the Group Executive Board.Thomas Cook Organizational structures Thomas Cook has a more flexible organization structure.   Disadvantages Poor communication across functional areas Limited view of organizationalngoals Broad of Director The Board is chaired by Non-Executive Chairman. P. Inc. (tenth ed.). In addition to the Chairman. Northern Europe & Deputy to the Group Chief Executive Officer are also members of the Group Executive Board.. Management. Each of the committees of the Board is chaired by an Independent Non-Executive Director. Coordination with function areas In depth specialization. New Jersey: Pearson Education. M. Advantages and disadvantages of Geographical Departmentalization75    Advantages More effectives from putting together people with common skills.

“We always use a taster day.co.uk/webfiles/Research/Case%20Studies/Travel%20Training%20Case%20Studies/TUI _Case_Study_Oct_08.3. with over 40.pdf Page | 109 . we‟re actually looking for people who do have strong numeracy and literacy skills and we‟re looking for people with personality. TUI also look for people with strong personal attributes such as motivation and personality. Human Resources Management 5. an interview and a „taster day‟ in a branch which allows them to experience the real working environment and understand what the role entails.people1st.1. “In order to get onto the apprenticeship programmes. Accredited Programmes Manager)76 In addition to looking for people with literacy and numeracy skills.TUI Travel plc Apprenticeship programme There is extremely high demand for the Apprenticeship programme at TUI.Thomas Cook Organizational structures chart: 5. This includes an online assessment focusing on literacy and numeracy skills.3.people1st. We want people who are driven to succeed. an extensive and rigorous selection process is in place for the 450-500 positions. What we want are people who are motivated.1." (Andy Smyth. And what we do find is that lots of people will either immediately realise it‟s for me or it‟s not for me.co.uk/webfiles/Research/Case%20Studies/Travel%20Training%20Case%20Studies/TUI _Case_Study_Oct_08.” (Andy Smyth.1.000 applicants each year.3.500 website enquiries and 15. Recruitment 5. So what we do is we bring people into the location and see how they get on with the tasks which are typical of the day. Accredited Programmes Manager)77 Content and delivery 76 http://www. Due to the high volume of applicants.pdf 77 http://www.

Each apprentice is also allocated a workplace mentor based in the same shop as them. retention and motivation of staff Page | 110 . They visit on a monthly basis and ensure that learning is taking place. This includes an Apprenticeship Expert in each region whose role is to coordinate training and ensure that the apprentices are progressing in line with the programme. with a focus on completing the technical certificates There is a strong support network available to ensure the apprentice receives all the help they require. There are a number of Shop Managers in each region who are responsible for the delivery of training to apprentices.To successfully complete their apprenticeship. three technical certificates (providing the knowledge and understanding which underpins the NVQ) and two key skills as shown in the table below: Apprentices receive all the normal training a non-apprentice receives such as a first day induction in store. Most mentors are ex-apprentices themselves and are there to provide support. In addition to this. Benefits of the apprenticeship programme Research carried out by People1st has highlighted the main benefits of the apprenticeship as being: • Increased recruitment. health and safety training. daily store briefings and an hour of training each week where the store is closed. Apprentices are assigned an assessor to guide them through the framework and support them with action planning. apprentices must complete an NVQ. An important element of the programme is that the content has been designed to meet the needs f their own organisation and all materials and workbooks are bespoke to TUI. TUI provides the following support to help apprentices complete their programme: • A two day „Welcome Event‟ • Five hours of study time per week • E-learning • Six formal off-the-job training days per year. inspiration and to help them progress.

the programme ran three times. TUI Horizons is run as a virtual business school. They have aimed to make it the programme of choice and this is demonstrated in the opportunities and career development available for apprentices. During 2009.3 million in sales in one financial year. An example was also given of an ex-apprentice who achieved £1. Strategy and Finance. Retrieved from https://homeaccess. Annual report TUI 2009-1. Saxion University G-Drive.• A demonstration of an organisation‟s commitment to training • Supporting performance and career development • Providing cost effective training • A programme that is consistent and structured • A programme which complements in-house training • Supporting the development of skills • Increased loyalty to the business At TUI the key business benefits of apprenticeships have been higher staff retention rates and greater sales performance. This individual became a shop manager at 18.nl/NetStorage/ Page | 111 . TUI intends to build on their successful apprenticeship programme by increasing places by up to 50% in the coming year. The table below shows clearly that the apprenticeship programme helps improve sales performance with ex-apprentice Travel Advisors achieving over 16% more sales than non-apprentices. For TUI the return on investment of the apprenticeship programme is a clear increase in sales performance and greater staff retention for those who have been through the programme. using a number of external experts and internal specialists from across the Group covering business topics including Tourism and the Business Environment.TUI has examined how ex-apprentices performance compares to non-apprentices in relation to sales revenue generated.saxion. 78 ). they will offer a number of one-day master classes on specific subjects that will provide ongoing opportunities for learning and networking. by ex-apprentices who regularly featuring in their „top-sellers‟ lists. This is illustrated for example. TUI Horizons78 TUI Horizons is a development programme for middle managers who have been identified as management talent with the potential to take up senior general management positions across the Group. TUI is an organisation which has a reputation for offering a first class apprenticeship programme. In short. Looking to the future. compared to those who haven‟t. In addition to the core modules. The average is £350k. they plan to extend the scope of TUI Horizons. In 2010. that demand for Apprenticeship places greatly exceeds supply. with 65 managers participating. It is unsurprising then.

This develops a multi-skilled workforce with year-round experience of delivering service to their customers. In the UK. variable compensation in the form of annual and longer term incentives helps drive the high performance that their results demonstrate. their trainees are offered permanent positions where possible. Staff Incentives Manager in UK & Ireland Mainstream and Project Manager for Specialist & Emerging Markets in Russia. colleagues are able to purchase shares in the Group through their Share Incentive Plan that provides one free share for every four shares purchased. To aid retention of talent and ensure focus on longer term shareholder value creation. In 2010.saxion. overseas representation and airline cabin crew roles where possible. China. This year. Reward programmes81 They operate competitive reward programmes to reinforce and support their overall colleague engagement strategy.nl/NetStorage/ Page | 112 .Recruiting for their long term success79 Their International Graduate Management Scheme is part of their strategy to recruit and develop the right people to ensure the long term success of their business. Annual report TUI 2009-1.saxion. Annual report TUI 2009-1. The majority of their colleagues participate in local benefit programmes including retirement benefit schemes and generous holiday discounts. as Sales & Retail Manager in Germany. To meet seasonal demands. they actively promote career opportunities across the Group to enhance the mix of professional and general management skills. Saxion University G-Drive. 79 ).nl/NetStorage/ 80 .saxion. the programme will also take into account how that performance was achieved by mapping the individual leader‟s actions to their winning behaviours. Saxion University G-Drive. Twelve trainees from nine countries – Belarus. Retrieved from https://homeaccess. France. In addition. The programme rewards financial performance of the business in which the individual works. This included seven trainees who were recruited into the scheme in 2009 and five trainees who joined the scheme in 2008. Germany. they move their topperforming frontline colleagues between retail.nl/NetStorage/ 81 . Hungary. Over 18 months. Talent across the Group is reviewed regularly at Board level and they are focused on retaining and developing individuals to drive the business forward. they use the most effective recruitment methods in the countries in which they operate and encourage the sharing of skills and knowledge to suit both the business and their colleagues. three trainees have joined the Group in permanent roles. India. Retrieved from https://homeaccess. trainees take on assignments in different parts of the Group lasting three/four months and also receive additional personal training and support during this time. Organisation effectiveness80 They support organisation effectiveness through talent management and recruitment processes. At the end of the scheme. Retrieved from https://homeaccess. the Netherlands. at least onequarter of the annual bonus achieved is deferred into TUI Travel PLC shares for three years or more. Saxion University G-Drive. As part of their recruitment approach. Sweden and the UK – participated in the International Management Trainee scheme in 2009. Annual report TUI 2009-1. This year they introduced an aligned incentive programme for their most senior leaders throughout the Group.

1. Learning and Development).which has three levels and provides staff with training opportunities which are clearly linked to career progression. As well as receiving regular training throughout the season.5. Thomas Cook “There‟s a clear progression path for every employee overseas” (Elinor Carr. staff are offered a range of development opportunities.3. One such opportunity is STARS – Senior Training and Recognition Scheme . Page | 113 .2.

which offers sports and adventures from 7 to 12 years of age for a few hours a day. Sport & Super Kids-guide and are planning to pull all kinds of shallow water exercise in the morning and beach volley tournaments and After Beach quizzes. 5. You are responsible for the quality of the implementation of the agreed program. exciting and fun sports activities for the planning and implementation.infectious joy of life! Itching to spread joy through the busy children and adults with a Finnmatkat Blue Village.The recruitment process onto STARS is rigorous and the required standard must be reached. Staff are expected to achieve a pass grade for each task and only when they have achieved the pass grade for all tasks set will they have passed the STARS in resort stage.1. Page | 114 . 5. our customers can play. Take care of the Super Kids-lastenkerhostamme.2. “The main benefit of the STARS programme is that it‟s very clear to every member of staff who starts working with Thomas Cook that there is the opportunity for career progression and for development. Exotic-Blue Village or Blue Star -In different parts of the world? Bamsekerho-director provide 3-6 years of age referred to Bamsekerhoissa. TUI and Thomas have different to recruitment requirements to hire different kind of people working under different brands name. and experience the adventure of any kind and get new friends. This in turn can help ensure staff are retained and promoted from within the business. Staff are expected to complete a range of tasks which have direct links to the company PROUD values.2. enabling suitable employees to be identified and trained for the next level.3. Finnmatkat children's smallest clubs. A key benefit of STARS is that it assists with succession planning. Job Selection As the international company with hundreds of brand names. and Super Kids Guide . Learning and Development). Blue Star hotels in replying to Finnmatkat 7-12 years old children Super Kids -Clubs. STARS also provides a clear career progression route for staff wish to develop and move up the career ladder.Finland TUI Finnmatkat children's and sports / activity leader Bamsekerho director and Sports. The tasks can be small (such as controlling the airport) or large (like organising a fund raising event in resort).3.” (Elinor Carr.

in fact. of course. you must also be prepared for hard work. As soon as the first part of your day since you're the team that solves the challenges together and whose members support each other always. Not thrive in Also holidays in resorts. also spend long periods away from another culture intimately. stay helpful and stressful conditions of service as a spiritual and. or exercise control of experience / education The benefit is calculated    Swedish or other Nordic language skills or any other language previous stay abroad esiintymisvarmuus / habit microphone Page | 115 . known as the Blue Spirit. Basic Requirements     high school diploma or equivalent Finnish language excellent oral and written communication skills good knowledge of English experience Children's Director  child or youth groups working with the training Sports Guide  Coaching. and a genuine enthusiasm are the most important tools. You are also service-oriented and know how to treat and help every kind of travel according to the situation. However. are the work benefits. You'll also get a sense of belonging. Successfully passed the course guarantee you a permanent job.Enthusiasm and service agreement Energi September. you can search for Blue Academy Travel School. and you will experience the Blue Spirit. A unique team spirit Finn Voyage is a unique spirit of service. which are other get paid large sums of money. Blue Academy Gran Canaria If you recognize the description of yourself and you meet the basic requirements presented below. much experience and often life-long friends.

pulikointia swimming pool as well as spiritual adventure racing. Requirements Experience in working with children is needed for this job.2. You are responsible for all these activities for the organization and inspiring in their own way with you are also children and young people excited about and participate in them. Fly. A bit older kids. We require that you have experience working with children.3. if you are not trained kindergarten teacher. The work is carried Sunwing-hotels. It is also good if you are interested in the creative or sporting duties. robinson. You speak also fluent English.5. Benefit shall be. You need to be social.Germany TUI Clerk / in Front Office Sales & Customer Support.2. football and water sports.com • Handling of inquiries and reservations by e-mail • Quotations • Cross-selling and up • Process management and accounting control • Ensuring the quality • Support for user questions and posting questions to redirect the client • Careful editing of complaints and maintenance of simple complaints talks Requirements • Training as a travel clerk • Extensive experience in dealing with relevant system applications (especially Amadeus.plus. play & chat. Midoco) • Extensive knowledge of MS Office systems • Geographic knowledge and sound local knowledge • Sales force.1. Inexso. recreation supervisor. knowledge and joy in dealing with Web-based applications • Consistent quality and Servicedenken • Enthusiasm and joy in dealing with people • Willingness to flexible working hours and adopting weekend shifts Page | 116 . Finland Thomas Cook Children’s guide Children & Youth as a director you must ensure that children feel comfortable and have something fun to do . such as crafts. communication skills and counseling skills • Good knowledge of English • Experience.com. Responsibilities • Settlement of sales and consultations on the phone for tui. outgoing and interested in children and young people's work. 5. organized activities such as crafts.3.com.3. Other languages are calculated advantage. nurse or teacher. IRIS. 1-2. We assume you are holding high school certificates as well as oral and written fluent in Finnish and Swedish language skills.variety of activities and games.com and discount-travel. Toma. football and / or water sports. painting.

and an interesting and versatile use in a motivated team.. annual work of the Settlement Area Hotel • Regular communication with its associated Shared Service Centers in the English language to clarify inconsistencies in the connected part of regulatory process and carried out there Requriements • completed commercial training.. resilience and self-confident communicative occurrence • Willingness to travel • Read and interpret UML processes and Page | 117 . ideally in the travel and tourism sector • Knowledge of accounting • Good English language skills • Reliable knowledge of MS Office applications (Winword. It is a part-time 20-30 hours / week (50% -75%) for full flexibility. data entry and correction of data regulierungsrelevanten • Data supply and maintenance of reporting in Excel files or other data tables • Communication with hotel and shopping destination management to ensure regulatory • Participation in monthly. quarterly.3. Excel) • Self-employed and responsible way of working • Strong ability to complex and process-oriented thinking • High operating and service readiness.Benifits . Germany (Thomas cook) Job dicription • Release of the tourist information on the regulation calculated under examination at specified dates and the release of the correct automatic Kosteneinbuchung and data available to the audit and credit creation for Handling-/Transferkosten and tours • Read and interpret contracts target for regulation as well as archiving and organization of the contracts • Monitoring and control of operations such as the assessment of contract interpretation for the accuracy of the automatic setting regulation • Regular quality control of the calculated and shared travel orders to regulate the basis of predetermined control evaluations • Data provision for parts of the department reporting • Read and interpret the appropriate department reports and independent control to meet given objectives • Clarification of Regulierungsunstimmigkeiten on a contractual basis. 5. A modern workplace.is made of people. The World of TUI . Are you ready to discover this world? The diversity is the wealth of the World of TUI.1.3.

Thomas Cook Thomas Cook places a great deal of importance on internal communications to create universal understanding of the Group‟s agenda. their key markets also host annual conferences to review the previous year‟s performance and set out the priorities for the coming year. The Group Chief Executive Officer visits the business segments throughout the year and communicates on a monthly basis to update Group employees on the Company‟s progress and performance. The performance review cycle gives every colleague the opportunity to meet their line manager at least once annually to discuss their performance and to make plans for development in the coming year. They involve their colleagues in business matters that affect them and respond to feedback received through employee surveys. Page | 118 . Regular communications within the segments keep our people up-to-date on the latest business and market developments.3. extensive social benefits and new challenges every day. employee forums and as part of the performance review cycle. 5.Advantage Thomas Cook offer an exciting work environment with international contacts.Emloyee engagement TUI TUI shared one vision and one set of values across the Group and have developed winning behaviours to support them.3. In addition.

4. However. and more detailed Training Programs than Thomas Cook Group PLC. Page | 119 . since TUI invests more in their Training Programs.3. Thomas Cook TUI Travel 5.4. Conclusion Since Both TUI and Thomas Cook are international travel company which have a very complex organizational structure. Personal expenses We want to compare the expenses of the employees to see how much money the companies spend on their personal expenses.5. TUI Travel and Thomas Cook have training programs with a wide range of variety. This makes TUI performs better in managerial aspect. Thomas Cook gains more on employee job satisfaction compare to TUI. This is because TUI has a more specialized division. which are more detailed and specific compared to TUI. TUI Travel invests more money in their people and the training programs more than Thomas Cook. but TUI Travel Trains their employee better.

com/1258/current_ratio.2 Performance/Target To measure TUI Travel PLC and Thomas Cook Group PLC. With making a benchmark on specific data we can use to compare both companies. o Quick Ratio  A measure of a company's liquidity and ability to meet its obligations86.investorwords.investorwords.com/3260/net_profit_margin. o Net Profit Margin  This number is an indication of how effective a company is at cost control.1.Chapter 6 Key Performance Indicators 6. financial analysis is crucial.com/4315/ROE. o Return on Total Assets82  A measure of how effectively a company uses its assets83. we have three financial KPIs with 7 PI :  Profit Ratios o Gross Profit Margin  The gross profit margin simply gives the percentage of sales available to cover general and administrative expenses and other operating costs. equal to a fiscal year's after-tax income84 Liquidity Ratios o Current Ratio  An indication of a company's ability to meet short-term debt obligations. 6.html http://www. the higher the ratio.html 85 http://www.investorwords.1.html Page | 120 . but financial performance are most important when we are judging how well a company manage their resources.html 86 http://www.1 Financial 6.com/5776/ROTA. Leverage Ratios o Debt-to-assets ratio   82 83 http://www.com/4008/quick_ratio. the more liquid the company is85.1 KPI Rationale Our group believe that to measure and to compare two companies performance.html 84 http://www.investorwords. o Return on Stockholder‟s Equity  A measure of how well a company used reinvested earnings to generate additional earnings. the more effective the company is at converting revenue into actual profit. and we can see which company is performing better. Financial benchmark only will not be able to judge the overall performance of a company. The higher the net profit margin is.investorwords.

 shows the proportion of a company's assets which are financed through
debt. If the ratio is less than one, most of the company's assets are financed through equity. If the ratio is greater than one, most of the company's assets are financed through debt. o Debt-to-equity ratio  A measure of a company's financial leverage. Debt/equity ratio is equal to long-term debt divided by common shareholders' equity.
6.1.3 Key Performance Indicators

Profit Ratios o Gross Profit Margin
Gross Profit Margin Year Ended Year Ended 30/09/08 30/09/07 23.19% 23.64% (0.2319) (0.2364) 7.33% 7.02% (0.0733) (0.702)

Thomas Cook Group PLC TUI Travel PLC

Year Ended 30/09/09 23.65% (0.2365) 8.35% (0.0835)

Year Ended 30/09/06 23.31% (0.2331) Gross Profit Margin

o Net Profit Margin
Net Profit Margin Year Ended Year Ended 30/09/08 30/09/07 2.37% 0.55% -1.94 % 0.08%

Thomas Cook Group PLC TUI Travel PLC

Year Ended 30/09/09 1.84% 0.89 %

Year Ended 30/09/06 0.17% 0.89 %

o Return on Total Assets87
Return on total Assets Year Ended Year Ended 30/09/08 30/09/07 0.80% 2.90% -2.91% 0.00%

Thomas Cook Group PLC TUI Travel PLC

Year Ended 30/09/09 0.24% -0.12%

Year Ended 30/09/06 0% -

o Return on Stockholder‟s Equity
Return on stockholder equity Year Ended Year Ended 30/09/08 30/09/07 2.38% 7.80% -10.38% 0.00%

Thomas Cook Group PLC TUI Travel PLC

Year Ended 30/09/09 0.85% -0.45%

Year Ended 30/09/06 0% -

Liquidity Ratios o Current Ratio

87

http://www.investorwords.com/3260/net_profit_margin.html

Page | 121

Thomas Cook Group PLC TUI Travel PLC

Year Ended 30/09/09 0.40 0.56

Current Ratio Year Ended Year Ended 30/09/08 30/09/07 0.55 0.62 0.71 0.85

Year Ended 30/09/06 0.57 -

o Quick Ratio
Quick Ratio Year Ended Year Ended 30/09/08 30/09/07 0.55 0.61 0.70 0.84

Thomas Cook Group PLC TUI Travel PLC

Year Ended 30/09/09 0.40 0.55

Year Ended 30/09/06 0.56 -

Leverage Ratios o Debt-to-assets ratio
Debt-to-assets Ratio Year Ended Year Ended 30/09/08 30/09/07 17.68 11.29 13.88 23.16

Thomas Cook Group PLC TUI Travel PLC

Year Ended 30/09/09 18.46 12.62

Year Ended 30/09/06 12.78 -

o Debt-to-equity ratio
Debt-to-equity Ratio Year Ended Year Ended 30/09/08 30/09/07 59.25 29.47 48.88 83.71

Thomas Cook Group PLC TUI Travel PLC

Year Ended 30/09/09 71.74 49.41

Year Ended 30/09/06 35.67 -

Page | 122

6.2 Marketing
6.2.1 KPI Rationale Our Team believed that through marketing benchmarking we can see who is a better player in presenting their product. Who is better on delivering the value to the customers, which Company scores more customer satisfaction. We do the Marketing benchmarking also in order to see who is the leading player, Who have the best SWOT for the Tourism Business 6.2.2 Performance / Target To measure TUI Travel PLC and Thomas Cook Group PLC, we have seven marketing KPIs with 5 PI :  Mission Statement  “A Mission Statement of the organization’s purpose – what it wants to accomplish in the larger environment”88. SWOT Analysis  SWOT analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieve that objective 89. Strategic Objective  The company’s statement needs to be turned into the Strategic Objectives, which include business objective and marketing objective to guide management. Market Position o Market Dynamics UK & Ireland o Market Dynamics Continental Europe o Market Dynamic Northern Europe o Market Dynamics North America o Market Dynamics Germany BCG MATRIX  The BCG matrix method is based on the product life cycle theory that can be used to determine what priorities should be given in the product portfolio of a business unit. To ensure long-term value creation, a company should have a portfolio of products that contains both high-growth products in need of cash inputs and low-growth products that generate a lot of cash. It has 2 dimensions: market share and market growth. The basic idea behind it is that the bigger the market share a product has or the

88 89

TUI Travel Annual Report 2009 http://en.wikipedia.org/wiki/SWOT_analysis

Page | 123

distributors. in the Thomas Cook  Scale (22m passengers out of 21 source markets). We have a stated strategy which is to create superior shareholder value by being the world’s leading leisure travel group providing customers with a wide choice of differentiated and flexible travel experiences to meet their changing needs To enable us to achieve this goal we have identified four key strategic imperatives which are linked to our KPIs.3 Marketing Key Performance Indicators 6.  Supply Chain  The network of retailers. Retrieved from http://www. Thomas Cook states itself with four different missions based on five main divisions: UK & Ireland.valuebasedmanagement.tuitravelplc.1 Mission Statement Thomas Cook Group PLC : Under the global vision “WE GO FURTHER TO MAKE DREAMS COME TRUE”. 90 valuebasedmanagement. TUI Travel PLC : “TUI Travel PLC does not have a Mission Statement.com/4823/supply_chain. from http://www. Continental Europe and Airlines Germany. The differences in the Thomas Cook ´s Mission Statements in different divisions are related on its flexible business models and concentrated marketing strategy for every different geography market.2 SWOT Analysis TUI Travel plc Strengths  Market leader tourism industry. North America.3.com/tui/pages/investors/shareholderinfo/faqs 91 92 Page | 124 .html FAQS. storage facilities    and suppliers that participate in the sale.investorwords.faster the product's market grows the better it is for the company90. transporters.”92 6.2. TUI Travel plc.net/ http://www. Distribution Channels Cross Channel Marketing E-Commerce 6. delivery and production of a particular product91.2. Retrieved 2010.3. Northern Europe.2.

(Fixed assets cover 34% of total assets)  Has no retention policy. Turkey.  Strong multi-channels distribution focusing on online sales. the focus on price and Page | 125 . Majorca. an international cooperation.  The two drivers of growth. Be a part of TUI AG.  Unique media methods in marketing (TUI song: Let´s make people smile).  Strong partnerships.  No1 market share of Canaries. Egypt and Rhodes. flexibility and business focus (such as frequent flyer programmes) make the low-cost model unappealing for most business travelers. Hotels and Resorts.  Has little or no scope outside of Europe. 96% would recommend TCNE.  25years average industry experience.  Unique concept hotels. which is operating business in Travel. and major share holder in Container shipping (43.  Stable and managementfriendly shareholders.33% holding in Hapag-Lloyd).  Lack of service.  Portfolio of strong brands  Speed of decision making and implementation  Industry leading margins  Tailored business model in each market  Strong multi-channel distribution capability  Asset light model improving  Strong and financial position  Positive customer feedback: 97% customer satisfaction. customer Weakness  Company registered a net loss of EUR 142 million in 2008 (Annual Report 2008)  Major reduction in the volume of holiday packages because of recession and financial uncertainties  Heavy Fixed Assets lead to the lack of flexibility and reduce the competition ability when the economic climate has high level of uncertainty.  Delivering high quality customers services. Cruises.

 More full-service airlines may withdraw from the regional market to focus on more profitable long-haul routes leaving the market to the low-cost operators. Threats  Changing consumer behavior in his global economic recession can influence company’s strategy.  Increased competition is likely to lead to greater difficulties in demanding incentives from communities.  Business expansion through further acquisition and mergers. Differentiation from there remains to be difficult.  The current recession is favorable as people and businesses are more costconscious. few connections. are more flexible in business models and strategies.  Threat of losing consumers who want a low-cost packagers because company’s focus on luxury hotels. such as Thomas Cook.  Competitors. Page | 126 . the focus on convenience (frequent flights. more nearby airports) are reaching their natural limits.  Experts predict great potential for future growth in the next years.  Companies cut on business travel in times of economic downturn and because of new timeconsuming security measures travel substitutes like videoconferencing are introduced. given the saturated market and the shortage of other options. Maintaining too many different brand names makes the company’s marketing and management expenses become too high.  Easy Jet’s own success makes it difficult to recruit and train staff quickly enough Opportunities  Expansion in developing markets such as India and China.  Recovery signs of the world economic after economic recession.  Competition is likely to intensify.

2.3 Strategic Objective Thomas Cook Group PLC :STRENGTHENING OUR BUSINESS AND INVESTING FOR GROWTH : “Creating superior shareholder value by being the world’s leading leisure travel group providing customers with the widest choice of differentiated and flexible travel experiences to meet their changing needs.6.3.” TUI Travel PLC Page | 127 .

1 Market Dynamics UK & Ireland TUI Travel plc Passengers93 5. notably foreign exchange.  Engaging in pro-active capacitive management in Travel Mainstream business by adjusting flight and hotel commitments to align supply and demand.2. • Develop our e-commerce strategy and move into the online travel agency market.  Key Brands 93 94 95 Page | 128 .  Focusing on flight-yield differentiated hotel portfolio in TUI Hotel and Resorts  Pursuing restrictive cash and working capital management.4% Mainsteam sector: #1 (34% market Mainsteam sector: #2 share)95 Financial services (Foreign Exchange market): #4 (7% market share) Financial services (Foreign Exchange market): #3 (15% market share) • Target further mainstream margin improvement through product and haul mix.687m Thomas Cook 7. Strategy Increasing the proportion of differentiated holidays and strengthening web.6% 2008 67.based sales. Ireland. • Build on our strong performance in key medium haul destinations outside the Eurozone.4 Market Position 6.2.4.6m (Including UK.6. • Continue to grow travelrelated financial services. and India) Controlled distribution94 Market position 2009 78% 2008 75% 2009 68. Middle East.

4. • Increase sales to medium haul destinations such as Turkey and North Africa.73m (Including Germany) Controlled 2009 97 distribution 46% Strategy  Thomas Cook 7m 2009 38.2 Market Dynamics Continental Europe TUI Travel plc Passengers96 9.3% 2008 37.  Focusing on flight-yield differentiated hotel portfolio in TUI Hotel and Resorts  Pursuing restrictive cash and working capital management.7% 2008 40% Expanding the tour operator business in growth markets like Russia and Ukraine.  Increasing the proportion of differentiated holidays and strengthening web.based sales. Key Brands 96 97 Page | 129 .2. • Continue to grow online distribution channels and improve dynamic packaging capabilities.  Expanding the market share in the German-speaking volume market for cruises.  Engaging in pro-active capacitive management in Travel Mainstream business by adjusting flight and hotel commitments to align supply and demand.6. • Increase sales of exclusive and differentiated product to maintain margin advantage.

Greece. concept hotels.  Engaging in pro-active capacitive management in Travel Mainstream business by adjusting flight and hotel commitments to align supply and demand.based sales.687m Controlled 2009 99 distribution 85% Strategy  Thomas Cook 1. Turkey and Thailand.2. • Continue to build on the success of our world class. • Consolidate our position in the major Nordic outbound destinations of Spain. •Further expand internet sales.6.  Focusing on flight-yield differentiated hotel portfolio in TUI Hotel and Resorts  Pursuing restrictive cash and working capital management.3 Market Dynamic Northern Europe: TUI Travel plc Passengers98 5.7% 2008 79. Key Brands 98 99 Page | 130 . Cyprus.4. inflight sales. • Increase the proportion of customers who book our exclusive.4% 2008 79% Increasing the proportion of differentiated holidays and strengthening web.5m 2009 82.

1m 2009 14. Key Brands 100 101 Page | 131 .7% Controlled distribution 101 0.4 Market Dynamics North America TUI Travel plc Passengers 100 Thomas Cook 1.  Focusing on flight-yield differentiated hotel portfolio in TUI Hotel and Resorts  Pursuing restrictive cash and working capital management.4.  Engaging in pro-active capacitive management in Travel Mainstream business by adjusting flight and hotel commitments to align supply and demand. especially online. • Strengthen controlled distribution.1% 2008 15. • Grow independent travel through dynamic packaging technology and improved product line.based sales. • Grow newly launched Financial Services division and expand product range.2.  • Pursue flight and accommodation cost savings and strengthen hotel exclusivities.6.54m (Including Mainstream and Specialists and Activity sectors) 2009 2008 Strategy Increasing the proportion of differentiated holidays and strengthening web.

6.2.4.5 Market Dynamics Germany TUI Travel plc
Passengers
102

Thomas Cook
5.9m 34
   

Number of aircraft Retail Estate Product Focus

8.775 million (Including Mainstream and Specialists and Activity sectors) 48
   

Own shop: 428 Franchise: 974 Strong focus on mainstream Highest brand equity in the Market

Controlled distribution
103

2009 46%

2008 40%

Ownshop: 166 Franchise: 395 Strong focus on mainstream market Well positioned with Neckermann brand in lower/ budget segment. 2008 2009

Strategy

Increasing the proportion of differentiated holidays and strengthening web- based sales.  Engaging in pro-active capacitive management in Travel Mainstream business by adjusting flight and hotel commitments to align supply and demand.  Focusing on flight-yield differentiated hotel portfolio in TUI Hotel and Resorts  Pursuing restrictive cash and working capital management.  Expanding the market share in the German-speaking volume market for cruises.

• Focus on cost-saving, especially fuel related efficiencies. • Drive synergies and other benefits through greater co-ordination of activities with other Thomas Cook Group airlines. • Enhance benefits from cooperation with other external airlines.

Key Brands

102 103

Page | 132

6.2.5 BCG MATRIX TUI Travel plc
Star       Activity Sector Specialist & Emerging Extra services (renting car) Package holiday Independent holiday (city breaks), Financial services (foreign currencies services and Money card, Travel insurances) Accommodation and Destination (organising meetings, incentives, conferences and events (MICE)) Hotels, resorts Airlines. Cruisers       

Thomas Cook
Component holiday, Extra (car hire), Activity Sector. Accommodation Package holidays Specialist Financial services related to travel

Cash Cows

Question Marks Dogs

  

  

Hotels Airlines Cruisers

Page | 133

6.2.6 Distribution Channels TUI
Travel Agencies Own retail shops Franchises Third- party distributions Ecommerce

Thomas Cook
Own Travel agencies Franchises Third- party distributions

All most every brands have the Thomascook.com: Each country brand website for customers to has one website for online book services online booking. http://www.firstchoice.co.uk/ http://www.thomascook.com/ http://www.thomson.co.uk/ http://www.thomascook.de/ http://www.arke.nl/wintersport.aspx http://www.thomascook.pl/ http://www.tuifly.com/de/ http://www.thomascook.fr/ http://www.neckermann-reisen.de/

Telephone Selling

Call Centers

Call Centers

Page | 134

Since management are about the people of the company and how they work and communicate with each other.3. both of them has hundreds of brands and but has specific needs of each brands. we believe that the management is the most essential part from a company. The differences in the Thomas Cook ´s Mission Statements in different divisions are related on its flexible business models and concentrated marketing strategy for every different geography market.3.3. Page | 135 .3. we have to make a benchmark on their Human Resources. who trains their employees better.6. 6. Thomas Cook states itself with four different missions based on five main divisions: UK & Ireland.2 Performance/Target  Company profile o Mission Statement o Vision and Mission o Sustainability Development and Social Responsibility Company Organization o Organizational Structures o Departmentalization Human Resources Management o Recruitment Plan o Selection   6.3.3.3.1Company profile 6. Since both TUI Travel PLC and Thomas Cook Group PLC is an International Tourism Company.1Mission Statement Thomas Cook Group PLC: Under the global vision “WE GO FURTHER TO MAKE DREAMS COME TRUE”. and specialization in each department. North America. that is what we are going to benchmark in this management key performance indicator.3 Performance/Target 6.1.1 KPI Rationale In order to determine TUI Travel PLC or Thomas Cook Group PLC is better. Northern Europe. Continental Europe and Airlines Germany.3 Management Key Performance Indicators 6.

These behaviours allow them to truly engage in their work and optimize their performance – as individuals and as a business.3 Sustainability Development TUI Travel Throughout the year.tuitravelplc.1.com/tui/pages/investors/shareholderinfo/faqs Page | 136 .3. TUI Travel plc.1.2 Vision and Mission TUI Travel plc Their common vision and values unite their across the Group and they call this their TUI Spirit. We have a stated strategy which is to create superior shareholder value by being the world’s leading leisure travel group providing customers with a wide choice of differentiated and flexible travel experiences to meet their changing needs To enable us to achieve this goal we have identified four key strategic imperatives which are linked to our KPIs.3.3. 6. sustainable development has continued to be an important part of the business agenda for TUI Travel.”104 6. they believe this goal will help build shareholder value for TUI Travel and contribute to operating a strong business now and in the future. In the long term.3. Retrieved from http://www. Thomas Cook These values are the focus for ensuring that every Thomas Cook employee embraces what they stand for and are PROUD to work with us delivering customer service that‟s second to none. They aspire to lead in sustainable development within the leisure travel industry.TUI Travel PLC : “TUI Travel PLC does not have a Mission Statement. Their vision is Making Travel Experiences Special and their four values are: • Responsible leadership • Customer obsessed • Value driven • Playing to win Winning behaviours have been developed to help embed these values in every day working life in a number of ways. 104 FAQS.

It has been developed in consultation with internal and external stakeholders. the positive cultural exchange and the boost to local economies. These responsibilities no longer sit on the periphery. business ethics and transparency and commits TUI Travel to upholding the principles of the UN Global Compact. articulating their vision and approach to sustainable development. including human rights.• TUI Travel is listed on the FTSE4Good Index in recognition of its transparency and for meeting strict social. TUI Travel‟s sustainable development strategy is based on consideration of the key issues affecting the Company. The travel and tourism industry has a responsibility to operate in a sustainable way and Thomas Cook. not least the travel industry. At Thomas Cook Group. terrorism incidents. They recognize the many virtues of travel. particularly when it comes to the environment. fluctuating exchange rates and the outbreak of swine flu. Society. their response to challenging market conditions is to work harder and go further to make dreams come true for their customers. • For the second consecutive year. but they are also aware of the potential impact on the environment. Policy and mitigation for Groupwide risks relating to sustainability are facilitated by the Group Risk Management and Sustainable Development Departments. investors. The Group Code of Conduct covers a wide range of sustainability issues. they developed a Group sustainable development policy in conjunction with key colleagues. which founded its business with clear social and educational intentions. 73% of TUI Travel businesses had their own sustainable development strategy. societies and local cultures. aligning with Group priorities. now and in the future. • TUI Travel‟s first full Sustainable Development Report was published in July 2009. They encourage all TUI Travel businesses to develop their own sustainable development strategy. at 16. intensified by many other factors including consumer confidence. environmental and governance standards. their importance represents a genuine business risk. customers. with independent verification of their targets by Bureau Veritas. with responsibility for managing such risks also shared by the businesses themselves. is proactive in this area. Sustainable development strategy of TUI Travel Plc During 2008/2009. Thomas Cook plc The last year has proved a testing time for all areas of business. They aim to have sustainability at the core of their business and feature it as an integral part of their strategy. but demand that both Page | 137 . • It is the highest placed travel company. The global economic downturn brought with it a decline in international tourism in 2009. At the end of 2008/2009. in the 2008 Good Companies Guide – The Observer‟s annual ethical ranking of FTSE350 companies. which highlights the top 10% of FTSE350 companies that have displayed the most professional approach to climate change disclosure. they have been included in the Carbon Disclosure Leadership Index. governments and communities no longer look for.

they‟re still inspired by their founder‟s values. but to all the people whose lives they touch. Over 160 years ago a former preacher. Their mission is to perfect the personal leisure experience. Today. And that includes managing their activities in a morally and socially responsible manner. Thomas Cook.time and money be invested in the preservation and protection of the incredible people and places they come into contact with. He believed affordable travel could change working people‟s lives for the better. They believe they make a world of difference – not only to their customers. Thomas Cook didn‟t just want people to have fun. unwind – and broaden their horizons. the business he founded has helped millions of people to relax. His company was inspired by a strong sense of social justice and moral responsibility: what today they call corporate social responsibility (CSR). Page | 138 . devised the first package holiday. Since then.

6.1 Organizational Structures TUI Travel plc Organizational structures TUI Travel plc Organizational structures chart: Page | 139 .3.2Company Organisation 6.3.3.2.3.

M. Robbins. New Jersey: Pearson Education.2. Advantages and disadvantages of Geographical Departmentalization106    Advantages More effectives from putting together people with common skills. P. (tenth ed. Page | 140 . (tenth ed. Management..).). Coordination with function areas In depth specialization. & Coutler.3. (2009).. Advantages and disadvantages of Geographical Departmentalization105   Advantages More effective and efficient handling of specific regional issues that arise Serve needs of unique geography market better   Disadvantages Duplication of functions Can feel isolated from organization areas other Thomas Cook Organizational structures Thomas Cook has a more flexible organization structure. (2009). Management. P. knowledge. S.3.6. and orientations. M. S. which is combined by Geographical Departmentalization and Functional Departmentalization (Groups Jobs according to function). New Jersey: Pearson Education. which means groups jobs according to Geographical Region. Inc. Inc. & Coutler.   Disadvantages Poor communication across functional areas Limited view of organizationalngoals 105 106 Robbins.1 Departmentalization TUI is using Geographical Departmentalization.

Staff are expected to achieve a pass grade for each task and only when they have achieved the pass grade for all tasks set will they have passed the STARS in resort stage. This in turn can help ensure staff are retained and promoted from within the business.saxion.nl/NetStorage/ Page | 141 .saxion.2. A key benefit of STARS is that it assists with succession planning. Annual report TUI 2009-1. Annual report TUI 2009-1.6. 107 ).2 Recruitment Plan TUI Travel plc Apprenticeship programme Content and delivery TUI Horizons107 Recruiting for their long term success108 Thomas Cook The recruitment process onto STARS is rigorous and the required standard must be reached. Saxion University G-Drive.3. The tasks can be small (such as controlling the airport) or large (like organising a fund raising event in resort).nl/NetStorage/ 108 ). Staff are expected to complete a range of tasks which have direct links to the company PROUD values. enabling suitable employees to be identified and trained for the next level. Saxion University G-Drive. Retrieved from https://homeaccess.3. Retrieved from https://homeaccess.

Research Methods for Business Students. T.Kotler. Prientice Hall. from http://www. (2009). IBMS Course Guide. (5th European edition . 7. Principles of Marketing. (tenth ed.. Saxion University G-Drive.com/business/resources/casestudies/students/financial. Page | 142 . (2006). Deventer. Saunders.saxion. P. Retrieved from https://homeaccess.net/ 12. Management.). 2.saxion.). The Netherlands: Saxion University of Applied Sciences.). Saxion University G-Drive. L. from http://college.nl/NetStorage/ 10.). M.saxion. THE ROLE OF FINANCIAL ANALYSIS. PrelimannouncementThomasCook.htm.nl/NetStorage/ 9. 5. Retrieved from https://homeaccess.valuebasedmanagement. 3. Retrieved February 2010. valuebasedmanagement. M. Annual report TUI 2009-1. Gowthorpe. Inc. (2010). (2005).. 2010.. BUSINESS ACCOUNTING AND FINANCE. Wong and Saunders (2008). C. (5 th ed. Retrieved February 06. (2009).nl/NetStorage/ 8.Chapter 7. (2nd ed. Lewis and Thotnhill (2009). D.nl/NetStorage/ 11. Armstrong. (tenth ed. Basic Business Statistic.cengage.). & Krehbiel. References 1. Robbins. 2. AnnualReportand TUI Accounts08. Cengage Learning. & Coutler. 6. New Jersey: Pearson Education. (2009).Inc. Saxion University G-Drive. (2009).saxion. New Jersey: Pearson Education. annual report Thomas Cook 2008-4. (2009). M. Berenson. S. C. Prientice 4. Retrieved from https://homeaccess. Retrieved from https://homeaccess. Saxion University G-Drive. Levine. Italy: Thomson.

Retrieved February 06.eu/?pag=84&doc=3116 17.html 14.firstresearch.cbi.org 18. First Research.com/IndustryResearch/Travel-Agencies-and-Services.org Page | 143 .org/wiki/Tourism 16. from http://www. http://en.etoa. http://www.aspx 15.org/Directory.wikitravel.13.wikipedia. http://www. http://www.wikitravel. 2010. http://www. Industry Profiles: Travel Agencies and Services Travel Agencies and Services.

90191 121.46853 -16.35664 5.08391 – 117.41958 -3.46841 6.37762 -0.26572 – -3.07637 19.94405 14.078.76923 -5.51747 0.28651 553.27261 5.76223 -9.30769 54.20269 0.95801 -10.49635 12.03496 -6. Plant & Equipment Thomas Cook 2007 Aircraft and Aircraft Spares Cost At 1 November 2005 Additions Exchange differences Disposals Disposal of subsidiary undertakings Transfer to non-current assets held for sale At 31 October 2006 Additions Acquisitions (note 18) – MyTravel – other Exchange differences Transfer from non-current assets held for sale Reclassifi cation Disposals At 31 October 2007 1091.40559 203.06993 -3.13286 7.67129 0.39848 -47.FINANCIAL APPENDICES Thomas Cook 2009 Thomas Cook 2008 Property.15384 0.18772 3.41958 -4.9 402.34965 130.55943 153.37062 521.91584 0.27972 -6.26568 – -0.77602 – -8.28671 203.34965 -16.44054 1.251.06993 -7.28671 2.48951 – 0.48951 -0.88 4.34965 187.43355 – – 1.05 243.979 107.95752 Freehold Land and Buildings Short Leaseholds Other Fixed Assets Total Page | 144 .64334 -121.38461 -0.44715 20.993 -83.61538 -31.76221 1.77622 0.06993 -0.72726 38.67819 2.93704 131.35656 -22.7691 187.76923 0.25174 – – -27.69212 12.

6993 Thomas Cook 2007 Converted to Poundsterling TUI Travel PLC 2008 Page | 145 .EUR/GBP 31 October 2007 0.

TUI Travel PLC 2009 Page | 146 .

Appendices 2.2 Acquisitions Thomas Cook Group PLC 2008 Acquisitions TUI Travel PLC 2008 Page | 147 .

Appendices 2.3 TUI Current Asset 2008 TUI Cash & Cash Equivalent 2008 TUI Assets Classifieds as held for sale 2008 TUI Current Trade and other payables 2008 Page | 148 .

Thomas Cook Current asset 2007 Thomas Cook Cash and Cash Equivalent 2007 Thomas Cook Trade and Other Payables 2007 Page | 149 .

Thomas Cook Current Asset 2008 Thomas Cook Liabilities 2008 Thomas Cook Derivative Financial Instrument Thomas Cook‟s 2008 Trade and Other Receivables Page | 150 .

Thomas Cook Current Asset 2009 Thomas Cook Current Liabilities 2009 Thomas Cook Financial Derivative 2009 Thomas Cook Borrowings 2009 Page | 151 .

TUI Travel PLC Current Asset 2009 TUI Travel PLC Current Liabilities 2009 TUI Travel PLC Cash & Cash Equivalent TUI Travel PLC Asset Classified as held for sale Page | 152 .

Appendixes 3 Page | 153 .

Project Organizational Analysis Page | 154 .

........................................................................................ 7.......................................................................... Project organisation.... Central research question........ Objective of the assignment.................................................................................. 12............................. 3 4 5 6 7 8 9 10 14 15 17 20 22 Page | 155 ................ 8...........Table of Contents 1............................................................................... Quality control............................................. 4.............................................. 2...... Introduction................................. Time Planning............................................. Literature.................................................................... Sub questions......... Cooperation Agreement Group 7......................... Declaration of approval................................................................................................................................................................ 6............................. Preconditions..................................... 10.................................................................... 11.................................... Feedback Form Milestones........................................................ 13... 3.......................................... Procedures and methods...... 9............... 5......

Quality control. As a group of 5 international IBMS students we are going to analyze and find out the best way about the objective. Introduction For the coming the second periods. marketing and Accounting. Further we will use the knowledge of last. we are going to do desk research with one in-depth interview. TUI and Thomas Cook. In addition to this. In the second period. we are going to set up a bench mark. Most of the information will be secondary data. For deeper insights. Next to this. It is based on benchmarking Key Performance Indicators (KPI‟s) of the two representative firms of the travel industry. In the first period of the project we will hand in a report in which about our project. but we will also look for primary data like scientific articles and annual reports. We will focus on several separate aspects: Project organization. and the books of this school year.1. we will make interviews to improve our project. The aim is to find information necessary to make our first report complete and to find more information about the several aspects mentioned above. we will analyze information which we have collected. we will clear every trend and development with current and factual data. Page | 156 .

TUI and Thomas Cook by identifying and comparing the Key Performance Indicators of the firms in order to find out “who is best in class”.2. Objective of the project Organizational analysis: Set up a bench mark based on quick scans of two representative firms of the travel industry. Page | 157 .

Central Research Question: Among TUI and Thomas Cook.3. which travel firm is better in business process and performance according to benchmarking the Key Performance Indicators? Page | 158 .

which are their financial performance ratios should be based on?  How are the profit ratios of TUI and Thomas Cook?  How are the liquidity ratios of TUI and Thomas Cook?  How are the activity ratios of TUI and Thomas Cook?  How are the leverage ratios of TUI and Thomas Cook?  How are the shareholder-return ratios of the two firms?  What are the financial forecasts of TUI and Thomas Cook? Case Management & Organisation Analysis      What are the structure of TUI and Thomas Cooks‟ Organisations? How do they manage their human resources? What are personnel training programs in the two firms? What do TUI and Thomas Cook do to control their service quality? How do they develop their management strategies? Case Marketing Analysis          What are the marketing models of TUI and Thomas Cook? What are their marketing objectives? What are the target market of TUI and Thomas Cook? How do they position and segment their target markets? How are their marketing performances? How they promote their products? Who are their competitors? In order to compete. Sub Question: Travel Industry Analysis       What is travel industry? How does the travel industry produce value and profit? What is the Business model of travel firms in European market? How much profit dose the whole travel industries generate? How is the Tourism market divided? What are the roles of TUI and Thomas Cook in European travel industry? Case Financial Analysis  What are the financial position of TUI and Thomas Cook?  In order to determine their financial positions.4. which is their pricing strategy? Which strategies TUI and Thomas Cook apply to improve their marketing performances? Page | 159 .

Case E-commerce UPS  What is e-commerce?  Which are common applications related to e-commerce activities of TUI and Thomas Cook?  How much profit do e-commerce activities create for the two firms? Key Performance Indicators  What are the Key Performance Indicators?  Which parts of the firms need to look at in order to identify their Key Performance Indicators?  What are the Key Performance Indicators to compare TUI and Thomas Cooks?  What are the similarities between TUI and Thomas Cook?  What are the differences between the two travel firms regarding to business domains?  Which firm is scored better about Key Performance Indicators? Page | 160 .

the explorative methods play the dominant role in analyzing the interpreting the data. newspaper and magazines. Procedures. carefully design our individual questions on questionnaires. It is descriptive research we are going to apply in this stage. And we will negotiate with organizations in a proper way.5. so most of our source will be secondary data. interviews are needed to gain more reliable and valid data. Page | 161 . Due to primary data is costly and difficult to gain access. methods In this project our task is to set up a bench mark based on quick scans of two representative firms of the travel industry to find out “who is the best in class”. In the second phrase. According to our research questions and objectives. Because we need to explore the reason why we think the chosen company is “better” than the other one. we will get our information through internet. depending on this objective. we will collect data on each aspect of these two companies and then make objective conclusions about the current condition. In addition. In the first phrase. we decide to conduct different types of research methods in different phrases.

So according to different strong point of each other. Vietnam. Mo and Dan will in charge of examining quality of group work. namely Indonesia. we divide our task as this frame: Ivander is good at organizing and creative thinking. after discussion.6. Duong will take care of the layout of each deliverables. Iraq and Rumania. so he will be the people who make an overall plan for us. And Gework will do the job of summaries our weekly questions before our supervision time. Project organization We have 4 nationalities in our group. Page | 162 .

Then we put up our parts on the public igoogle account. Ivander and Duong will check all of the work and set a final version of deliverable. In case of misunderstandings which are caused by incorrect grammar and spellings. the special spelling check system in WORD will be used to help with grammar.7. an effective way of quality control has been made. After that. First. after we finish our assigned parts. We are going to do our best to make our performance without grammar. Page | 163 . spelling as well as logical mistakes. Quality control We have reached an agreement that high quality of our deliverables is the most important part of our performance. everyone in our group can comment others work by direct edit.

2 Cooperation Agreements Introduction Time Planning Preconditions Declaration Procedures Project Organization Quality Control Objective of the assignment Central research question Sub question Literature Group Meeting About Milestone2 Making a plan and divide tasks to search data about Travel Industry Profile 06. Time Planning Week Deliverables are in bold below Milestone 1: Plan of Action Making groups. Comment Discuss questions All group member s 08.02 3.02.02 19.1 Group meeting 01.02 12.02 at 12 Page | 164 Dispense personal working .02 05.8.02at 12AM Meeting with Supervisor Meeting with our supervisor (Mr.02 03.02 20.02 Hand in Milestone 1 on 08. Mind mapping and pre-research Activities Person in charge Time Group Deadli ne Deliverables final deadlines 3.02 at 12 AM 3.3 Milestone 2 Travel Industry analysis Group Meeting + Questions Analyzing the collected data to All Group member s All group member s 15.02 17. Tartarin) every Friday afternoon to discuss about the milestones and project group process. preparation cooperation agreement. at 5 PM Dispense personal working Travel industry overview Development trends Challenges Financial information Industry forecasts Questions about milestone2 13.

03 Hand in Milestone 3 on 08.02 Group 24.4 Group Meeting + Questions AM 3.02 27.03 at 5 PM Meeting with our supervisor every Friday afternoon to discuss about the milestones and project group process.6 All group member s 08.5 Milestone 3.03 at 12 AM 3.9 Analyzing the 18.03 10.03 collected data at 12 about Management AM and Organization performances of 2 firms Study week/ retake exams period 2 Exam period Page | 165 All group member s 15.03 12.02 AM s Making a plan and divide tasks about milestone3 Search for financial performances of 2 firms Group Meeting + All 01.03 Questions group at 12 member AM s Analyzing the collected data about Financial information. Profit ratio liquidity ratios activity ratios Hand in Milestone 2 on 01.03 Dispense personal working .03 19.03 17.make Travel Industry Profile Questions about milestone2 3. Dispense personal working Dispense personal working leverage ratios shareholder-return ratios Group Meeting + questions about Milestone4 Making a plan and divide tasks Collecting data about Management and Organization performances of 2 firms Group Meeting + questions 3.03 at 5 PM Dispense personal working 13.7 Milestone 4 Case: Management & Organization 3.02 at 12 member 26.03 06. Case Financial analysis Spring Holiday Break All 22.83.

04 09.04 23.04 14.4.05 17.05 at 1 PM All group member s Hand in Report Benchmark travel industry on Thursday 12 Page | 166 .05 at 5 PM 4.05 Hand in Milestone 7 on 07.7 Writing the Benchmark report Group Meeting + questions about Milestone7 Analyzing the collected data about KPI of 2 firms Group Meeting + questions about the Benchmark report Making a plan and All group member s 03.04 28.1 4.04 01.04 16.04 Hand in Milestone 4 on 05.05 05.04 at 12 AM 4.04 30.05 15.05 12.05 05.5 Milestone 7: Key Performance Indicators 4.04 17.04 at 5 PM 4.3 All group member s 19.04 at 12 AM All group member s 12.04 at 5 PM 10.04 at 12 PM 26.05 07.4 Milestone 6: Case Ecommerce UPS Making a plan and divide tasks Collecting data about Case Ecommerce UPS Analyzing the collected data about Case Ecommerce UPS May holiday Break Group Meeting + All questions about group Milestone 6 and 7 member s Making a plan and divide tasks about milestone7 Collecting data about Key Performance Indicators 24.05 at 12 PM Hand in Milestone 6 on 03.04 07.05 at 12 AM 10.04 21.2 Milestone 5: Case Marketing Group Meeting + questions about Milestone5 Making a plan and divide tasks Collecting data about Marketing performances and strategies of TUI and Thomas Cook Group Meeting + questions Analyzing the collected data about Marketing performances and strategies of TUI and Thomas Cook Group Meeting + questions about Milestone6 All group member s 05.64.04 Hand in Milestone 5 on 19.

05 21.05 PM 4.4.05 20.05 at 12 AM 21. Prepare the slides Presenters 19.10 Exam week Retake project report (when/if necessary) Retake oral defense (if necessary) Presentation Benchmark Travel Industry Oral defense + Peer evaluation Retake project report Retake oral defense Page | 167 .9 Exam period Peer evaluation 4.8 Study week en retake Period 3 divide tasks about the Benchmark report Writing the Benchmark report Checking the report draft Checking and printing out final report Group meeting to divide tasks about Presentation.

we need ask advices from our project supervisors and teachers in order to accomplish our project objective. which is very difficult to achieve. Since we are all the new student of IBMS. We only have 20 weeks to make a complete and high-quality report. and only stick to the time planning and finish our report on time are not enough to make our project perfect. We can only improve ourselves by exchanging ideas with each other. before the interview conduct in the real context. Precondition: There are several possible limitations may emerge during the project.9. we have to design a questionnaire in a logical layout. After discussion. Page | 168 . our group members should not be shy to present their ideas. we are working in a group within three different nationalities. It is very important to communicate with each other in a proper way and keep our group moving on. we regard pilot test a best way out. in the second phrase. so we are lack of practical experience about management and organisation. In addition. First of all. Secondly.

Retrieved from https://homeaccess. (2005). Saxion University G-Drive.nl/NetStorage/ 9. S.10. (2009). 2. Prientice 3. Basic Business Statistic. New Jersey: Pearson Education. from http://www.saxion. M. M. Saunders. 4. Research Methods for Business Students. 5. Retrieved from https://homeaccess. Saxion University G-Drive. Armstrong.nl/NetStorage/ 10.nl/NetStorage/ 8.. 2. Berenson. Levine.). Gowthorpe. Retrieved February 2010. 1. Retrieved from https://homeaccess.valuebasedmanagement. (2009).. (tenth ed.. Wong and Saunders (2008).net/ Page | 169 . (2009).nl/NetStorage/ 7. IBMS Course Guide. M. (2010). BUSINESS ACCOUNTING AND FINANCE. L.saxion. The Netherlands: Saxion University of Applied Sciences. Prientice Hall. PrelimannouncementThomasCook. (2006). T.). (2009). D. Italy: Thomson. Principles of Marketing. AnnualReportand TUI Accounts08. C. Literature 1.Inc.). Inc.).Kotler. annual report Thomas Cook 2008-4. Management. (2nd ed. C. Robbins. Retrieved from https://homeaccess. Deventer. (5th European edition . (2009).saxion. Annual report TUI 2009-1. Saxion University G-Drive. (tenth ed. & Krehbiel. New Jersey: Pearson Education. Saxion University G-Drive. (5 th ed. 6.saxion.). P. valuebasedmanagement. Lewis and Thotnhill (2009). & Coutler.

from http://college. Industry Profiles: Travel Agencies and Services Travel Agencies and Services.cengage.firstresearch. from http://www. Retrieved February 06. THE ROLE OF FINANCIAL ANALYSIS.com/IndustryResearch/Travel-Agencies-and-Services. 12. 2010. Cengage Learning.html Page | 170 . Retrieved February 06. 2010.11.com/business/resources/casestudies/students/financial. First Research.htm.

Name: Corhana Dan Andrei (2430403) Class: DIM1VA Email: omu82005@yahoo.com Telephone: 0681103403 8.Have a sense of responsibility for our project work . Name: Gework Petrosjan (2431488) Class: DIM1VB Email: gework_carnal@hotmail.(2430318) Class: DIM1VC Email: phamthuyduong206@gmail. Name: Pham ThuyDuong.com Telephone: 0634456259 9.Cooperation Agreement Group 6 (Period 4) Contact information:     Names (Student Number) Class Telephone numbers E-mail addresses 6.com Telephone: 0634456259 10.Attend all meetings Page | 171 .com Telephone: 0614575660 Foundation for cooperation and basic rules . Name: Mohammed Ababakar (2431451) Class: DIM1VB Email: irak_mo@hotmail.com Telephone: 0684103949 7. Name: Ivander Laurentius Atmojo (2430243) Class: DIM1VA Email: ivander_atmojo@ymail.

or notice your absence . .Everyone is going to use the same layout which is Times New Roman 12 .Show initiative and be open for ideas .Everybody agrees on taking each other seriously and help each.. send the agenda one day before the meeting.Our deadline for each week will be 12:00 am on Saturday! .Always use the British Spell Check before sending your work .Each group member will be assigned as chairman once.The whole group is equal so everyone has to show their best and to work as a team .The work of any member will be checked by the other group members and improved if necessary Agreements as to how to interact with one another - The language that will be spoken is English Page | 172 .The language that will be spoken is English . Rules of participation . or you will be get a warning.Follow the planning as discussed and stick to it .Be on time for meetings.Upload your task on our public igoogle account . So always be prepared to be a chairman. please contact other members before at least 2 hours in advance.Be on time for each meeting (if you cannot come.Have 2 official group meetings per week. Rules of reporting . Part of these rules is about the way in which the group members address one another in the case of failures. . and 2 warning means that you are kicked out) .Be polite to each other Rules of presence and absence.

Pham Thuy Duong Ivander Laurentius Atmojo Corhana Dan Andrei Gework Petrosjan Mohammed Ababakar Page | 173 .If there are any problems or worries just talk about it so it won‟t stay in the way of our work Intercultural Show respect to each other‟s culture and be aware of cultural difference Always communicate each other in English but not your mother tongue Try your best to achieve cultural synergy I agree with all the group rules and targets in this agreement and I will do my best to achieve a better result.- Everyone should give his own opinion Act as a group (teamwork!!!) .

2. Name: Ivander Laurentius Atmojo (2430243) Class: DIM1VA 13. 3. Name: Pham Thuy Duong.Declaration of approval 11. Name: Gework Petrosjan (2431488) Class: DIM1VB 15. All sources (inclusive Internet/WebPages) used have been mentioned source indications as footnotes. the Netherlands Date: Signatures Pham Thuy Duong Ivander Laurentius Atmojo Corhana Dan Andrei Gework Petrosjan Mohammed Ababakar Page | 174 . Name: Corhana Dan Andrei (2430403) Class: DIM1VA 14. The following work does not contain more than 5% work of other people or sources.(2430318) Class: DIM1VC 12. The Report is our own work and no author‟s rights/copyrights have been violated. Name: Mohammed Ababakar (2431451) Class: DIM1VB Hereby declare that: 1. Place: Deventer.

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